Mattel shares surged more than 15% after the toy giant said it’s weighing price increases for Barbie and other iconic brands because of President Trump’s tariffs on Chinese goods.
The El Segundo, Calif.-based company — which also makes Hot Wheels, Fisher-Price and American Girl — makes most of its toys in China, which are now subject to 10% tariffs. It also has opened factories in Mexico, which could be hit with a 25% tariff that could go into effect March 1. It has factories in seven countries altogether.
Nevertheless, Mattel said it expects sales will increase as much as 3% this year despite an overall slowdown in toy sales last year – which were down 0.3% in the US, according to Circana. Its fourth-quarter adjusted earnings were 35 cents a share, versus the 20 cents a share Wall Street had expected.
The upbeat forecast “includes the anticipated impact of new US tariffs on China, Mexico and Canada imports announced on February 1 and mitigating actions we plan to take, including leveraging the strength of our supply chain, and potential pricing,” Mattel said in a statement.
Mattel shares on Wednesday were recently up 14% at $20.66.
“Pricing is relatively easy to implement in the toy industry because about 80% of the items are new in any given year,” DA Davidson analysts Linda Bolton Weiser told The Post. “Kids want what they want regardless of price.
The analyst added she expects Mattel “will seek concessions from suppliers as well and they have a lot of power to negotiate because they are so big.”
Mattel said its earnings per share will be $1.66 to $1.72 per share compared with $1.62 in 2024.
“It sounds as if Mattel’s mitigating efforts could include a combination of shifting production out of China, pricing and supply chain optimization,” according to a UBS research note in which the investment banks also raised Mattel’s stock estimate to $29 from $26.
Still, “Any tariff is bad for the toy business,” James Zahn, editor of Toy Insider told The Post.
“The margins are already thin and retailers are pushing toy manufacturers to eat the bulk of it,” Zahn said. “At the end of the day, prices will go up — there’s no way around that. And, should Mexico become a target again, that will impact Mattel directly as they’ve already nearshored some production to Mexico.”
President Trump paused 25% duties on imports from Mexico and Canada, but a 10% tariff on goods from China went into effect.
About 80% of all toys are made in China and the toy industry is still hopeful that the Trump administration will carve out an exemption for toys as it did previously in the president’s first term.
Meanwhile, it’s not clear when or if Mattel will raise prices but it won’t help boost sagging sales of Barbie.
Its signature doll grew by leaps and bounds in recent years, fueled in part by the Barbie movie in 2023, but last year sales began to slow down.
During the crucial holiday season, Mattel’s sales grew by 1% in the fourth quarter in the US, fueled by action figures and Hot Wheels.
Gross billings for dolls worldwide were down 8%, primarily due to declines in Barbie, the company said on Tuesday.
