Mattel Inc., the maker of Barbie dolls, Scorching Wheels automobiles and different fashionable toys, stated Monday that it would have to raise prices for some merchandise bought within the U.S. “the place crucial” to offset greater costs associated to President Donald Trump’s tariffs.
The El Segundo, California-based firm stated the will increase are crucial although it is dashing up its plans to diversify its manufacturing base away from China. Trump imposed a 145% tariff on most Chinese language-made merchandise.
Firm executives instructed analysts on a convention name that China at present accounts for 40% of Mattel’s international manufacturing. The corporate plans to transfer roughly 500 merchandise this yr from producers in China to sources in different international locations, in contrast to 280 merchandise final yr.
For some extremely wanted toys, Mattel stated it would enlist factories in a couple of nation. To stop attainable shortages, the corporate stated it was specializing in getting merchandise to shops with out interruptions.
The corporate stated that even with worth will increase it expects 40% to 50% of its toys will price clients $20 or much less.
“The diversified and versatile provide chain in international business organizations are clear benefits to Mattel on this interval of uncertainty,” CEO and Chairman Ynon Kreiz instructed analysts.
Citing the continuing uncertainty surrounding the president’s commerce insurance policies, nonetheless, Mattel withdrew its annual earnings forecast on Monday. The corporate stated it could be “tough to predict” client spending and the corporate’s U.S. gross sales for the rest of the yr with out extra info.
Mattel reported larger-than anticipated first-quarter gross sales but additionally a wider loss. Mattel stated gross sales rose 2% to $827 million for the quarter that ended March 31.
The corporate’s loss expanded to $40.3 million, or 12 cents per share, within the quarter. That compares with a lack of $28.3 million, or 8 cents per share, within the year-ago interval.
Analysts anticipated a lack of 10 cents on gross sales of $786.1 million for the primary quarter, in accordance to FactSet.
Mattel’s shares have been down lower than 1% in after markets buying and selling.
This story was initially featured on Fortune.com
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