Hasbro and Mattel face drops in toy sales amid tariff fears

In the second quarter of 2025, the two largest toy manufacturers in the United States, Hasbro and Mattel, reported a decrease in sales of traditional toys. This decline was attributed to delayed orders from retailers who were concerned about potential price hikes due to tariffs. The companies released their earnings reports, where both expressed confidence that they are positioned to manage any tariff impacts in the upcoming months. Chris Cocks, CEO of Hasbro, indicated that the delayed ordering could pose challenges for toy manufacturers to restock popular items during the critical holiday season. The revenue from Hasbro's Wizards of the Coast and digital gaming segment saw a notable growth of 16%, contrasting with a 16% drop in their consumer products segment, highlighting the shifts in consumer demand. Despite these challenges, both Hasbro and Mattel surprised analysts by surpassing expectations for their earnings. The recent release of Magic: The Gathering, particularly a collaboration with Final Fantasy, became a financial success, indicating that while traditional toy sales struggled, certain product lines were performing well. Mattel's sales decline was slightly greater than analysts anticipated, yet they remained optimistic due to potential upcoming releases. Furthermore, collaborations and the use of AI to enhance product offerings were mentioned as strategies for maintaining market relevance. Retailers are now faced with the uncertainty of stock availability for popular items as they approach the holiday shopping season. This situation is critical, as certain toys could sell out quickly if restocked inadequately, leading to potential losses in sales opportunities. The toy industry is experiencing a pivotal moment as companies navigate through tariff implications while also striving to innovate within their product lines to capture consumer interest.