Mattel has withdrawn its full-year financial guidance and announced price increases for several of its products sold in the U.S., as President Trump’s aggressive tariff measures create mounting cost pressures for the toy giant. The company cited a volatile economic environment and unpredictable U.S. consumer behavior in the wake of escalating tariffs as the primary reasons for its decision. The U.S. market, which accounts for nearly half of Mattel’s global sales, has become increasingly challenging due to trade tensions. Currently, about 20% of Mattel’s products sold in the U.S. are imported from China, but the company plans to reduce that figure to below 15% by 2026.
The broader trade war between the U.S. and China has disrupted global supply chains and imposed duties exceeding 100% on some products, severely impacting industries like toy manufacturing. Mattel CEO Ynon Kreiz acknowledged the disruption, noting that many companies have already halted shipments to the U.S. because of Chinese tariffs. He reiterated the company’s support for the Toy Association’s call for zero tariffs on toys and outlined plans to shift portions of the supply chain to other countries. As part of these adjustments, production of the UNO card game is being ramped up in India to serve the U.S. market, while Chinese-made products are increasingly directed toward international customers.
Other manufacturing locations such as Indonesia, Malaysia, and Thailand have also faced reciprocal tariffs imposed by the Trump administration, though those measures were temporarily paused for 90 days in April. Mattel estimates that the tariffs will result in $270 million in additional costs this year, starting in the July quarter. However, the company is implementing cost-saving measures expected to offset the impact. It has already raised its annual cost-savings target from $60 million to $80 million and plans to scale back promotions to preserve margins.
Despite the turbulence, Mattel reported a stronger-than-expected first quarter, with net sales reaching $827 million, surpassing analyst expectations. The adjusted loss per share was limited to three cents, also beating projections. The company repurchased $160 million in shares during the quarter and reaffirmed its $600 million buyback target for 2025. Although rival Hasbro has maintained its guidance thanks to a strong gaming segment, Mattel remains under pressure as it adapts to a shifting trade landscape and evolving consumer demand.
READ MORE: