Mattel CEO Says Tariffs Aren't Hurting Toy Demand

Watch Mattel CEO Says Tariffs Aren't Hurting Toy Demand - Bloomberg on Dailymotion

Transcript

00:00So, as people are getting ready to buy toys for Christmas season,

00:04what do you want them to know the most about what they should be buying in the toy world?

00:09You know, we are so proud of what we do.

00:13Every Christmas we create product that we believe stands out in a very crowded aisle, the toy aisle.

00:20And our job is to continue to do things that will excite and delight fans

00:24and partner with our retailers to create an offering that will be very compelling.

00:30Of course, it's always about Barbie, Hot Wheels, American Girl, Fisher-Price, Uno, Monster High,

00:38endless collection across multiple price points.

00:42You can buy a Hot Wheels die-cast car for $1.25,

00:48or you can buy a collector set that we did together with Daniel Arsham, a famous artist,

00:54for $700 on Mattel Creation.

00:57So, broad spectrum of product offering at different price points.

01:02And part of what we do is to create an offering that will appeal for people and children

01:09across all demographics in different price points.

01:14As we talk today, President Trump is shortly going to be meeting with President Xi Jinping,

01:19presumably to deal with tariffs and other things.

01:21But to date, the tariffs that have been imposed on China,

01:24has it adversely affected toy companies and particularly Mattel?

01:28Well, at the start of the year, the issue was about cost impact of tariff on product.

01:35Then the question became, what about consumer reaction to price increase in response to tariff?

01:41Now, what we're seeing is that companies have mitigated for the cost impact.

01:47Consumer demand for toys is growing, has been growing every quarter in the U.S. and overseas.

01:54What we have seen is that retailers have postponed their decision in making orders to the very back end of the year.

02:00But seeing that there is demand, there is consumer demand, people are buying product at retailers,

02:06we expect to see a good holiday season and a strong growth quarter for Mattel.

02:12Now, about 50 percent of tariffs that have been imposed by the federal government have not been passed along to customers.

02:18They're being absorbed by the people that are paying the tariffs.

02:21Are you absorbing a large part of the tariffs or are you passing along some of it?

02:25Well, we have several mitigating actions that we're taking.

02:28Much of it is about diversifying our manufacturing footprint and using the fact that we are making product in seven different countries

02:35so you can optimize and modulate and create a flexible model that responds to tariff and shifting market conditions.

02:43And this is very much part of our journey to create a flexible supply chain that is responsive.