Mattel, Inc (NASDAQ:MAT) said it plans to raise prices on toys sold in the US as the company scrambles to offset the potential impact of tariffs, even as it delivered stronger-than-expected first-quarter results.
The maker of Barbie dolls and Hot Wheels scrapped its full-year forecast, citing uncertainty over US trade policy under the Trump administration and its potential effects on consumer spending.
CEO Ynon Kreiz said the company is lobbying for toys to be excluded from new tariffs, but is preparing for higher costs by shifting production and passing on some of the burden to shoppers.
The company reported a 2% rise in first-quarter net sales, or 4% in constant currency, to $827 million, topping Wall Street expectations. Adjusted gross margin expanded by 130 basis points to 49.6%, while adjusted EBITDA rose 7% to $57 million.
China now accounts for less than 40% of Mattel’s production—well below the industry average of 80%—and the company aims to cut its US imports from China to below 15% by 2026 and under 10% by 2027.
Despite strong demand and healthy performance across categories such as action figures, dolls and games, Mattel said the uncertain tariff landscape made it difficult to provide guidance for the remainder of the year. It also raised its 2025 cost-savings target to $80 million, up from $60 million previously.
Jefferies analysts remained cautiously optimistic, noting that while Mattel appears well-positioned with its product lineup and licensing deals, tariff exposure presents real risks.
“We continue to like MAT's product and license release line-up for the year, but note that its direct and indirect exposure to tariffs is material,” Jefferies wrote.
“Given this dynamic, we view MAT's current setup as high-risk but with the potential for high returns if the US consumer remains stable.”