Speaker 1: Bloomberg Audio Studios, podcasts, radio news.
Speaker 2: But we begin with Mattel, the toymaker, which relies for
Speaker 2: a large part of its business on petroleum based plastics.
Speaker 2: It makes iconic brands like Barbie and Fisher. Price has
Speaker 2: accelerated efforts to diversify its supply chain as it navigates
Speaker 2: oil price volatility and tariff uncertainty. Joining us now as
Speaker 2: the CEO Eon Christ He joins us from the UBS
Speaker 2: Global Consumer and Retail Conference in Midtown Manhattan, Enon. Thanks
Speaker 2: for your time. Let me first get your take on
Speaker 2: the war in Iran. It doesn't look like it's going
Speaker 2: to let up anytime soon. How are you dealing with
Speaker 2: it at Mattel.
Speaker 1: Well, I'm matt Thanks for inviting me. You know, like
Speaker 1: the rest of the world, we're following developments and we'll
Speaker 1: see where things go. We believe over the next few
Speaker 1: days or a couple of weeks it would be easier
Speaker 1: to know where things are heading.
Speaker 3: It feels like it's just constant supply chain disruption. Perhaps
Speaker 3: you've gotten more use to trying to tackle it in
Speaker 3: on after COVID and tariffs, but now there's this concern
Speaker 3: what happens to petroleum based products like those like toys
Speaker 3: that happens at MATEL. How do you think about hedging
Speaker 3: higher oil prices? How do you deal with that internally.
Speaker 2: Well.
Speaker 1: Supply chain is one of our competitive advantages over the
Speaker 1: last few years. We continue to diversify and evolve our
Speaker 1: supply chain and develop a system that is flexible and
Speaker 1: modular and is able to respond and adapt to changing
Speaker 1: market conditions. Typically, when supply chain is tested, we stand out.
Speaker 1: We stand out and we navigate situations. It's not that
Speaker 1: we're insulated, but we have the system, we have the
Speaker 1: capabilities and expertise to navigate changing market conditions.
Speaker 2: We heard from Downstound the beginning of his second term
Speaker 2: saying that you know, maybe kids only need one or
Speaker 2: two dollars, not thirty. No one gave the message to
Speaker 2: my daughters. But we've seen toy prices actually come down
Speaker 2: in the last few months. Obviously there was a rise
Speaker 2: when we put the tariffs on, and I think we've
Speaker 2: got this brilliantly charted by our economics correspondent, Michael McKee.
Speaker 2: But then we've seen drops in December, in January, in February.
Speaker 2: We're seeing toy and game prices falling. Can you explain
Speaker 2: that drop?
Speaker 1: Well, the toy industry is a growth industry. It's growing
Speaker 1: twenty three out of the last twenty five years. It
Speaker 1: grew strongly last year at over six percent, and we
Speaker 1: saw positive consumer demand for our product in the fourth
Speaker 1: quarter and the full year, both in the US and internationally,
Speaker 1: So we do see demand for our products. We saw
Speaker 1: it last year. Growth came from both prices but also
Speaker 1: a value so the industry is healthy. We know that
Speaker 1: play is a fundamental human behavior that parents will always
Speaker 1: prioritize spending money on their children, especially when it comes
Speaker 1: to quality product and trusted brands. And it's also a
Speaker 1: strategic category for retailers that it's driving food traffic and
Speaker 1: toy shoppers spend more time in store and typically have
Speaker 1: a bigger basket, so it is a strategic category for retailers.
Speaker 1: And we expect the toy industry to continue to be resilient,
Speaker 1: not completely insulated, but resilient in challenging economic times. And
Speaker 1: we believe it's a growth industry that will continue to
Speaker 1: grow over time.
Speaker 3: Just on that point edon, have you seen any change
Speaker 3: in behavior for the past week and a half?
Speaker 1: Not too early to tell too early to tell, But
Speaker 1: as I said, this is an industry that is driven
Speaker 1: by innovation and big brands. The importance of big brands
Speaker 1: is higher than ever in a world of unlimited shelf
Speaker 1: space and r biquitous distribution. That this is not just
Speaker 1: in toys, it's also an entertainment and other consumer facing
Speaker 1: parts of the industry of the economy. So big brands
Speaker 1: are always going to stand out. And this is exactly
Speaker 1: the core part of our strategy. How do we leverage
Speaker 1: the strength of our brands, the fact that people are
Speaker 1: proactively looking for opportunities to engage with our brands to
Speaker 1: create experiences and product that stand out and continue to
Speaker 1: excite in the light fans all over the world.
Speaker 2: How do you do that with hot wheels specifically, non
Speaker 2: because Barbie, you know, I see everywhere and we all
Speaker 2: watched the movie and there's no question about where to
Speaker 2: pick up those products with hot wheels in matchbox. I'm
Speaker 2: not really sure where to go to get these things.
Speaker 2: Sometimes I see them like on an otherwise empty shell
Speaker 2: fit best Buy, or occasionally they're in the supermarket at
Speaker 2: the checkout. But I only see the kind of visibility
Speaker 2: for those cars that I do for the.
Speaker 1: Dolls well hot Wheels achieved last year, it's eighth consecutive
Speaker 1: record high, and we expect another strong double digit growth
Speaker 1: year for Hot Wheels in twenty twenty six. Hot Wheels
Speaker 1: is perhaps one of the best representation of our brand
Speaker 1: strategy and how we continue to grow our IP driven
Speaker 1: play and family entertainment business. You're seeing innovation in Hot Wheels.
Speaker 1: We're expanding bay patterns, user demographics. We seeing a very
Speaker 1: large contingent of adult fan and collectors. We're offering more content,
Speaker 1: more experiences, stunt shows, the Hotwells, Legend tour, mobile games,
Speaker 1: and it's becoming a lifestyle brand. It's much more than
Speaker 1: a toy. It's lifestyle brand and we sell product in
Speaker 1: five hundred thousand stores globally. Hot Wheels is in every
Speaker 1: single one of them. And the good news bad news
Speaker 1: in what you just described is that in some cases
Speaker 1: we cannot keep up with demand. There is a lot
Speaker 1: of excitement around Hot Wheels, and you should also look
Speaker 1: at Mattel Brickshop, which is our Hot Wheels branded The
Speaker 1: building said play pattern that is that something is something
Speaker 1: we launched last year is and selling like hotcakes. We
Speaker 1: cannot keep up with the men. It's really about innovation
Speaker 1: and bringing these brands to life in new ways that
Speaker 1: the light fans and continue to evolve and expand the
Speaker 1: experience beyond the toy isle.
Speaker 3: In the world of innovation, I think the other thing
Speaker 3: people are quite excited about Enon is your partnership, your
Speaker 3: collaboration with open AI.
Speaker 2: When are we going to.
Speaker 3: See our first AI produced toy Enon? When might we
Speaker 3: get something out of that partnership.
Speaker 1: We continue to innovate in different ways and look to
Speaker 1: embrace technology and benefit from our ability to find new
Speaker 1: ways to engage fans. When it comes to AI, we
Speaker 1: believe this will be a meaningful addition to how we work,
Speaker 1: how we innovate, and how we do things more efficiently,
Speaker 1: more productively, faster at lower cost. In terms of integrating
Speaker 1: technology and AI into our product and experiences, we believe
Speaker 1: that this will represent an exciting way for us to
Speaker 1: reinvent and amplify existing play patterns and at the same
Speaker 1: time do it very responsibly. Given the implication of AI,
Speaker 1: so we're very mindful of privacy of safety and how
Speaker 1: do we embed and integrate the technology in a responsible way.
Speaker 1: We will be able to share more later this year,
Speaker 1: but we're very excited by the things we're working on.
Speaker 1: And again it's all down to innovation and changing paradigms
Speaker 1: and looking at new ways to reach and engage fans
Speaker 1: all over the world.
Speaker 3: All right, Enian, thank you very much for joining us,
Speaker 3: and enjoy the rest of the conference that is enon
Speaker 3: Christ CEO of Mattel