Mattel Weighs Price Hike Amidst Tariff Pressures

By Patricia Miller

Feb 05, 2025

2 min read

Mattel is considering price hikes to offset tariffs, while financial growth and product performance insights provide vital information for retail investors.

Pretty dolls in a dress posed a light neutral background.

What You Need To Know

Mattel Inc (NASDAQ: MAT) is contemplating price increases for Barbie and Hot Wheels toys as a strategy to counterbalance tariff-related expenses. The company's initial focus is on enhancing supply chain efficiency or relocating some production before implementing any price adjustments. This decision stems from a 10% tariff imposed by the Trump administration on products manufactured in China, where Mattel relies on 40% of its manufacturing. Additionally, the toy industry as a whole sources 80% of its products from China.

Financially, Mattel's Q4 performance saw a slight revenue rise of 1.6% to $1.65 billion, with adjusted earnings surpassing analysts' expectations due to effective cost management. However, a decline in overall toy demand led to a 1.1% drop in sales for 2024, although the company anticipates revenue growth of up to 3% in 2025 and plans to initiate $600 million in stock buybacks.

Notably, Hot Wheels emerged as the fastest-growing product segment, whereas demand for Barbie and baby products declined. In a diversification effort, Mattel is expanding into films and video games, having benefitted significantly from the success of the 2023 Barbie movie.

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Why This Is Important for Retail Investors

  1. Understanding pricing strategies helps retail investors gauge how companies respond to market pressures, affecting stock performance.

  2. Awareness of tariff impacts on major consumer goods companies like Mattel enables investors to better assess potential risks and opportunities in their portfolios.

  3. Insights into product performance and diversification strategies reveal a company's adaptability and long-term growth potential.

  4. Awareness of ETF options linked to consumer discretionary sectors can help investors diversify their exposure and mitigate risk associated with individual stocks.

Relevant ETFs

Some investors prefer to invest in stocks via an exchange-traded fund for ease and reduced risk. Some relevant ETFs include the following:

  • Vanguard Consumer Discretionary ETF

  • SPDR S&P 500 ETF Trust

  • iShares U.S. Consumer Goods ETF

  • First Trust Consumer Discretionary AlphaDEX Fund

  • Invesco S&P 500 Equal Weight Consumer Discretionary ETF

  • iShares Global Consumer Discretionary ETF

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Important Notice And Disclaimer

This article does not provide any financial advice and is not a recommendation to deal in any securities or product. Investments may fall in value and an investor may lose some or all of their investment. Past performance is not an indicator of future performance.

Patricia Miller does not hold any position in the stock(s) and/or financial instrument(s) mentioned in the above article.

Patricia Miller has not been paid to produce this piece by the company or companies mentioned above.

Digitonic Ltd, the owner of ValueTheMarkets.com, does not hold a position or positions in the stock(s) and/or financial instrument(s) mentioned in the above article.

Digitonic Ltd, the owner of ValueTheMarkets.com, has not been paid for the production of this piece by the company or companies mentioned above.