Trump's Tariffs Hit Mattel's Barbies: Will Americans Pay 'A Couple Of Bucks More' As President Predicts?

Toy company Mattel Inc MAT beat analyst estimates for first-quarter revenue and earnings per share Monday.

Attention now turns to the impact of President Donald Trump’s tariffs, with the company ready to raise prices ahead of Christmas.

What Happened: Mattel posted first-quarter revenue of $827 million, beating an analyst estimate of $786 million. The company reported a loss of 3 cents per share, beating an estimate of 10 cents per share, according to data from Benzinga Pro.

Mattel CEO Ynon Kreiz called the quarter "strong" and said the company continued its "operational excellence."

"Our brands are thriving, our products and experiences stand out in the marketplace, and our balance sheet gives us resilience and flexibility to execute our strategy," Kreiz said.

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The company said it will take action to offset incremental costs from tariffs, including diversifying its supply chain, improving product sourcing, and raising prices when necessary.

Mattel also paused full-year 2025 guidance given the "volatile macro-economic environment and evolving U.S. tariff landscape."

Raised prices by the owner of Barbie could prove a test of whether parents will be willing to spend more on toys for Christmas or cut back on the number of toys given higher prices, something President Trump illustrated in an example answering a reporter's question.

Trump said China has made over a trillion dollars selling the United States things it doesn’t need. The president brushed aside concerns about store shelves being empty, including those selling toys.

“Well, maybe the children will have two dolls instead of 30 dolls,” Trump said. “And maybe the two dolls will cost a couple of bucks more than they would normally.”

Trump said ships from China are “loaded with stuff we don’t need.”

The president's latest comments underscore his administration's stance that more items should be manufactured in the U.S., even if they cost consumers more.

In an interview with CNBC, Kreiz downplayed the notion of Mattel bringing manufacturing to America, a goal of Trump's with tariffs. "We don't see that happening," he said.

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Kreiz noted that portions of the toymaking process, such as design, development, product engineering and brand management, occur in America.

Mattel has been working on diversifying its global manufacturing for nearly 10 years to lower its dependence on China. Kreiz said in two years, no country will handle 25% or more of the company's sourcing, including China, which will represent around 540% at the end of 2025.

While Mattel aims to keep many of its prices under $20, the company will raise prices on many items to offset the rising prices.

"To continue to create a quality product and find the balance of price and value all in the service of the consumer," Kreiz added.

With the price increases, time will tell if Trump was right about Americans being willing to pay a few dollars more.

Why It's Important: Toy companies like Mattel and Hasbro Inc. HAS face tough times ahead of the Christmas shopping season.

As Benzinga previously reported, China produces around 80% of all toys, and many holiday season toys take four to five months to manufacture, package, and ship to the United States, all steps that have been mostly put on pause in the region.

Trump's comment about children only needing two dolls went viral online. White House senior advisor Stephen Miller also told the media that Americans will be willing to pay more for toys made in America, citing safety and quality concerns about toys made in China.

Talk show host Jon Stewart poked fun at Trump's toy comments during a recent episode of "The Daily Show," as reported by Variety.

"I have a niece. 11 years old. Loves dolls. I was going to get her 20 or 30 of them for her birthday, just to see the joy of a child. You can't put a price tag on that," Stewart said.

Stewart then played the clip of Trump saying kids needed fewer dolls.

"It's just not that many dolls," Stewart added. "Sure, she can have a small tea party with her dolls. But her dream had been a quasi-realistic ‘Conclave' reenactment with dolls. That's what she wanted!"

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