Mattel gets 40% of its toys from China and says it will raise prices ‘where necessary’ to offset Trump tariff costs
Mattel Inc., the creator of Barbie Dolls, Hot Wheels Cars and otherspopular toyssaid on Monday that it should increase the prices of certain products sold in the United States “if necessary” to compensate for higher costs linked toPresident Donald Trump's prices.
The company based in El Segundo, California, said that increases are necessary even if it accelerates its plans to diversify its manufacturing base far from China. Trump imposed a 145% rate on most Chinese manufacturing products.
The company's leaders told analysts on a conference call that China currently represents 40% of Mattel's world production. The company plans to move around 500 products this year from China manufacturers to sources from other countries, compared to 280 products last year.
For some highly sought -after toys, Mattel said that he was enlisting factories in more than one country. To avoid any shortages, the company said that it focused on obtaining products in without interruption stores.
The company said that even with price increases, it provides 40% to 50% of its toys will cost customers $ 20 or less.
“The diversified and flexible supply chain in global commercial organizations is clearly advantageous for Mattel in this period of uncertainty,” CEO and President Ynon Kreiz told analysts.
Citing continuous uncertainty surrounding the president's trade policies, however,Matelwithdrew his forecasts from annual profits on Monday. The company said that it would be “difficult to predict” consumer spending and the company's American sales for the rest of the year without more information.
Mattel said larger sales than planned in the first quarter but also broader loss. Mattel said sales increased by 2% to $ 827 million for the quarter that ended on March 31.
The loss of the company increased to $ 40.3 million, or 12 cents per share, during the quarter. This is compared to a loss of $ 28.3 million, or 8 hundred per share, during the previous period.
Analysts expected a loss of 10 cents out of sales of $ 786.1 million for the first quarter, according to Fostst.
Mattel's shares fell less than 1% after market trade.
This story was initially presented on Fortune.com
