Mattel Withdraws Annual Forecast Amid $270M Tariff Hit

Mattel reported better-than-expected first quarter results with a 2% year-over-year revenue increase to $827 million, and improved gross margins, but paused its full-year 2025 guidance due to ongoing economic uncertainty and the evolving U.S. tariff landscape. The company expects tariffs to increase costs by hundreds of millions of dollars this year and indicated that the volatile macroeconomic environment makes it difficult to predict consumer spending, especially for the remainder of the year and holiday season. In response, Mattel is accelerating efforts to diversify its supply chain away from China, aiming for less than 15% of U.S.-sold toys from China by 2026, and less than 10% by 2027. The company is also planning targeted price increases on some U.S. toys and raising its annual cost-savings goal. Despite the strong quarter, investor sentiment remained cautious, with shares falling after the earnings release and the company withdrawing its annual forecast. Mattel maintains its $600 million share repurchase target for 2025 as it continues to focus on operational efficiency and cost management.