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The toy firm Mattel could increase US costs to offset the price of Donald Trump’s tariffs on items made in Mexico and China, its chief govt has warned.
Ynon Kreiz informed the Monetary Instances that lower than 40 per cent of Mattel’s manufacturing was in China whereas Mexico accounted for lower than 10 per cent. The US president has imposed an extra tariff of 10 per cent on Chinese language items and threatened tariffs of 25 per cent on imports from Mexico and Canada.
“We imagine we’re very effectively positioned to leverage the energy of our provide chain to mitigate for tariffs,” Kreiz mentioned as Mattel launched fourth-quarter and annual outcomes on Tuesday. “And we’re additionally contemplating potential pricing actions to mitigate for the tariffs.”
Enterprise and client items associations have urged the brand new administration to rethink tariffs, which Trump has mentioned are essential to counter flows of medicine and migrants illegally getting into the US.
However public corporations have been reluctant to make concrete predictions over the consequences of tariffs, as they wrestle to maintain up with speedy coverage adjustments or search to keep away from antagonising Washington.
California-based Mattel is likely one of the world’s largest toymakers with merchandise together with Barbie dolls, Sizzling Wheels automobiles and the Uno card recreation. About half of its world gross sales combine is within the US, Kreiz mentioned.
The corporate on Tuesday reported internet gross sales of $1.6bn within the fourth quarter, up 2 per cent 12 months on 12 months and barely greater than a consensus estimate compiled by Seen Alpha. Internet revenue fell 4 per cent within the quarter to $141mn, extra that twice the revenue forecast.
Mattel shares rose by 9.5 per cent in after-hours buying and selling.
“Trying into 2025, we plan to develop each prime and backside line and this consists of the tariffs which have simply been introduced,” Kreiz mentioned.
Mattel’s merchandise are made in seven international locations together with China, Indonesia, Malaysia, Mexico and Thailand. Kreiz mentioned the corporate’s share of manufacturing from China was lower than half the trade common.
The brand new tariff on China went into impact on Tuesday. Trump agreed on Monday to pause the tariffs on Mexico and Canada for 30 days following calls with Mexican President Claudia Sheinbaum and Canadian Prime Minister Justin Trudeau.
In 2018, Mattel started to diversify its provide sources. By 2027, nobody nation will characterize greater than 25 per cent of its world manufacturing footprint, Kreiz mentioned.
