The news: Mattel paused its full-year 2025 guidance, citing macroeconomic volatility and uncertainty surrounding US tariffs.

That’s a shift from February, when the company’s outlook offered signs of a long-awaited rebound after years of stagnation; it projected sales would rise up to 3% YoY and earnings would grow over 6%. But the shifting trade landscape has cast doubt on those targets.

Though Mattel now manufactures less than 40% of its products in China—including around 20% of what it sells in the US—it plans to raise prices on select items to offset tariff-related cost pressures.

The results: The guidance freeze overshadowed what was otherwise a solid Q1.

• It reported a per-share loss of 3 cents, beating expectations by 7 cents.
• Revenues were $826.6 million, up 2.1% YoY and $35.1 million above forecasts.

Our take: Mattel may have outperformed expectations in Q1, but it’s still firmly in the crosshairs of the US-China trade war. While it has done more than many other toymakers to diversify its supply chain, its exposure remains a significant challenge.

Shifting production further isn’t simple. Building out new factories, securing alternative partners, and restructuring logistics takes time and capital—resources that are harder to deploy when margins are already compressed by inflation and uncertainty.

On the demand side, the picture isn’t much brighter. Toys are classic discretionary purchases, and consumers under economic pressure are pulling back. That leaves Mattel navigating from both sides: rising costs on one end, and softening demand on the other.

The road ahead will hinge on pricing power, supply chain agility, and the company’s ability to keep shoppers engaged as household budgets tighten.