For the kids sitting waaaaaaaay in the back . . .
Mattel's Seven-Year Shift Away From China
Mattel has been working for a long time to reduce its dependence on Chinese manufacturing and to have multiple manufacturing locations around the world for its top products, Kreiz said.
"We have been on this journey for seven years. This is not happening overnight." he said.
While price increases may be necessary for some toys, those decisions will be "in close collaboration with our retail partners, while always keeping the consumer in mind," Kreiz said.
Mattel currently manufactures about 40% of its worldwide toy sales in China, but
only 20% of the toys it sells in the United States are made there. The company's goal is to reduce the percentage of U.S.-bound toys that are made in China to less than 15% by 2026, and less than 10% by 2027.
The majority of the toys in two of its top selling brands, Barbie and Hot Wheels, are manufactured outside of China, Mattel Chief Financial Officer Anthony DiSilvestro said on the call.
China, however, remains the manufacturer of a good portion of Mattel's dolls and playsets, which means Mattel will "have to watch its pricing very closely, especially heading into the holiday season," James Zahn, Editor-In-Chief of the Toy Book, said in comments after the earnings call.
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