It’s official: you won’t be able to afford as many dolls as in the past.
That’s based on Mattel’s first quarter financial report, released yesterday. While the results indicated that the company had a resilient first quarter, it also foreshadowed price hikes to come.
In a meeting with investors, the company reported net sales of $827 million for the period, up 2% year-over-year, but pulled its full-year 2025 guidance “given the volatile macro-economic environment and evolving U.S. tariff situation.” Mattel CEO Ynon Kreiz also shared that while Mattel has a three-pronged plan to mitigate tariff-based losses, prices for some products are expected to rise.
The Barbie-maker’s report comes as President Trump has turned dolls into a kind of symbolic flashpoint in his ongoing trade war. According to the Toy Association, a national industry group, nearly 80% of the toys sold in the U.S. are sourced from China—meaning that toy and doll companies have been scrambling to absorb the impact of Trump’s 145% tariff on Chinese goods.
Last week, the President commented on reports that store shelves could soon be empty due to the tariffs on China and resulting tanking import volume by acknowledging potential price hikes. “Somebody said, ‘Oh, the shelves are gonna be open,’” the president told reporters. “Well, maybe the children will have two dolls instead of 30 dolls, and maybe the two dolls will cost a couple of bucks more.”
Now, it appears that the President’s uncharacteristically frugal suggestion is inching closer to becoming a reality as Mattel is forced to rethink its supply chain and prices in order to offset the cost of Trump’s tariffs.
Mattel has a 3-part tariff mitigation strategy
On yesterday’s call, Kreiz told investors that Mattel’s tariff-mitigation plan includes three main approaches: “Accelerating diversification of our supply chain and further reducing reliance on China-sourced products, optimizing product sourcing and product mix, and where necessary, taking pricing action in our US business.”
Shifting the supply chain away from China is one of Mattel’s top priorities for a reason. The U.S. represents about half of Mattel’s global toy sales, and the company imports about 20% of its goods sold in the U.S. from China, according to a Reuters report. Mattel told Reuters it would reduce imports into the U.S. from China to below 15% by 2026.
The company was planning to reduce reliance on Chinese manufacturers even before Trump took office, assuring investors back in December that, in 2025, Mattel will source less than 40% of its goods from China as opposed to the industry average of over 80%.
Ultimately, there will be price hikes on play time
But, for Mattel, these supply chain steps likely still won’t be enough to absorb tariff-based fees, which finance chief Anthony DiSilvestro said in a post-earnings call are expected to reach $270 million in incremental costs over the course of the year, starting in the July quarter.
As an added measure, Kreiz told investors that consumers can expect “pricing adjustments” on some products. While he didn’t share details on specific products or price increases, he did predict that 40% to 50% of all Mattel product will remain at or under the $20 threshold.
“This is something we are committed to do,” Kreiz told CNBC of the new prices this morning. “To continue to create quality product and find the right balance of price and value all in the service of the consumer.”
Deeper supply chain disruption could be yet to come
The Mattel price increase announcement comes amid deep disruption to store supply chains, which are expected to increase as U.S. imports from China plummet and stockists pause orders. There was a nearly 43% drop in containers received from China week-over-week between April 21 and April 28, according to port data from Vizion.
Retailers typically place orders for the holiday season around now as well, indicating a possible negative downstream effect later in the year. “We have a frozen supply chain that is putting Christmas at risk,” Greg Ahearn, chief executive of the Toy Association, told the New York Times.
However, consumers could notice reduced product availability and purchasing power even sooner. “Retail inventories may actually look ‘lean’ in coming months,” a May report from the Bank of America Institute stated.
Fast Company has reached out to Mattel for more specific examples of the coming price hikes. The company did not respond by time of publication.