Hasbro CEO details tariff impact: 'We're making rapid changes'
In a Thursday interview with CNBC's Jim Cramer, Hasbro CEO Chris Cocks detailed how the toy maker is trying to diversity its supply chain and adapt to President Donald Trump's steep tariff hikes on China, one of its top suppliers.
"I think we're making rapid changes," he said. "You know, our goal was to get to about 40% of global sourcing out of China by the end of 2026. I think we'll hit that much earlier."
According to Cocks, Hasbro has shifted some manufacturing to countries including the U.S., Turkey, China, Japan, India, Vietnam and Indonesia. So far in 2025, he said the company has relocated several hundred SKUs from China to these other locations.
However, he affirmed that China is "always going to be an important place for us to source product." Toy making can be labor intensive and require specialized types of labor, he stressed — and Chinese manufacturers have expertise in making specific items like high-end action figures. They also dominate the market for lower-end electronics and foam swords, he continued. But over time, Cocks predicted that other "sources of supply will mature," and Hasbro will be able to diversify production even in those more specialized categories.
Hasbro on Tuesday reported an earnings beat, but it forecasted that if Trump's 145% duty on imports continues, the company could take a $300 million hit to its bottom line. However, management was fairly optimistic its diversification strategy would help mitigate any losses.
Cocks conceded that he expects prices to go up. But he claimed the increases might be lower than peers because of "sourcing flexibility." The company also has some padding because 50% of revenue generated in the U.S. is either domestically-sourced or from "experiences or digital games," he said. Cocks added that trade policy remains "a pretty fluid situation," and Hasbro expects there will be "movements on the tariff front" as the Trump administration negotiates deals with more countries.
"I think most families, you know, when they think about a toy, they think about $10 or $20. They're not thinking about $30 or $50 or $100, that's very few and far between," he said. "So, we're trying to selectively keep core items, particularly giftable items, at those $10 and $20 magic price points."
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