How Did the Two Major Toy Giants Perform in the First Half of the Year?

On July 23rd local time, Mattel and Hasbro respectively announced their performance for the second quarter and the first half of this year. Overall, the situation in the toy sector is not very optimistic.

Let’s first take a look at the much-anticipated revenue figures (Note: Hasbro only reports data from its Consumer Products segment). Although overall toy market data from Circana shows year-on-year growth in the U.S. for the first half of this year, the performance figures of the two major American giants have both declined. Notably, Mattel shifted from growth in the first quarter to a downturn in the second quarter. See the table below for details:

Data source: Official performance news Table by: China Toy & Juvenile Products Association

Due to the impact of policy uncertainty, both companies have begun to increase their own inventories. Mattel's inventory value increased by 11.71% year-on-year, rising from $777 million in the same period last year to $868 million this year. Hasbro's inventory growth was even larger, reaching 17%, rising from $358 million in the same period last year to $417 million this year. Compared to last year's fourth-quarter Christmas season, the increase is as high as 52%. According to Hasbro's official disclosure, this is due to the resumption of orders and imports from China starting in May, but the old inventory rate remains at a historical low.

From the sales performance by region, the entire Americas segment, including the United States and Latin America, has seen a decline in sales. Both Europe and Asia regions experienced varying degrees of growth. Among them, the Asia region of both companies showed the largest increase across all major regions. Mattel and Hasbro's Asia regions grew by 14% and 5% respectively in the first half of this year. Hasbro's performance in Latin America was extremely weak, with revenue declines exceeding 20% in both the first and second quarters. Please refer to the table below for details.

Source of data: Official performance news Table prepared by: China Foreign Toys Network

What are the views of the two companies on the impact of tariffs?

Earlier, during the announcement of the first-quarter financial report, Hasbro's CEO stated that the company would incur a loss of $100-300 million this year due to tariffs. Even after reaching a new 20% tariff agreement between the U.S. and Vietnam (one of Hasbro's important production bases), the company would still lay off 3% of its workforce due to cost issues.

Despite initial pessimism, Hasbro's confidence in the company's full-year growth outlook has strengthened due to the digital gaming division and Wizards of the Coast achieving substantial growth for two consecutive quarters (increasing by 46% and 28%, respectively). As a result, the full-year performance forecast has been raised from slight growth to a mid-single-digit increase (approximately 4%-6%).

In contrast, Mattel's attitude is relatively cautiously optimistic: before taking effective mitigation measures, the estimated tariff risk loss this year is less than $100 million; all necessary price increase measures have been implemented to cope with U.S. tariffs, but about 40%-50% of U.S. products are still priced below $20. Due to this cautious attitude, the full-year performance forecast has been slightly lowered, from a sales growth of 2-3% for the whole year to an increase of 1-3%, but confidence in sales growth remains.