Hasbro has 30 per cent of its manufacturing outside of China with the aim of heading towards 40 per cent over the next few years.
The global toymaker is already manufacturing in a number of territories with 25 per cent of its US revenues sourced from local manufacturing.
The firm has confirmed that by this autumn, Play-Doh will be manufactured in the US added to the companies revenues garnered from US manufacturing for the US.
“We are moving more production outside of China,” said Brian Goldner, Hasbro CEO and chairman. “We found some great new partners and territories that provide very high quality product that can meet with our specification.”
In terms of potential imposed tariffs, Hasbro has been working with and talking to the administration and congressional delegates to ensure the business is communicating the “terrible impact the ongoing tariff or trade war would be.”
While the toy business is not part of the 303 designation currently set in place, Hasbro’s Goldner has confirmed they will be “monitoring the situation.”
“We continue to talk and firmly believe in a free trade environment as the best course for our company and for the industry.”
Reiterating the company’s plan to move more production out of China, he said: “The US business still receives 35 per cent of its product outside of China, but 65 per cent from Chinese manufacturing, and again, we are moving more production outside of China.
“We found some great new partners and territories that provide very high quality product that can meet with our specification.”
Below is a transcript from the Hasbro exec team’s conference call:
Report, Drew Crum: Thanks. Good morning everyone. Brian, I wonder if you could comment on the potential for a tariff and any update on what Hasbro’s doing in anticipation of that? And I think this is very topical little over year ago and you made the decision to move PLAY-DOH manufacturing to the U.S. And I think at the time you said you hope to have more then 3% of your manufacturing outside of China. So just want to get an update there? And then I have a follow-up.
Brian Goldner, CEO and chairman, Hasbro: Yes. Thanks. So we do have 30% of our manufacturing today outside of China and we’ll head toward 40% over just the next few years. We’re manufacturing in a number of territories. For the U.S., we source 25% of U.S. revenues in the United States in manufacturing locally across five different states. We’ll add to that, the PLAY-DOH manufacturing that will come this fall we’re gearing up for that now. And so that should add that to our revenues garnered from U.S. manufacturing for the U.S. And so again, the U.S. business overall still receives 35% of its products outside of China, but 65% from Chinese manufacturing, and again we are moving more production outside of China. We found some great new partners and territories that provide very high quality product that can meet with our specification.
And in terms of the tariffs we’ve been working with and talking to the administration and our congressional delegations to ensure we’re communicating just how terrible an impact the ongoing tariff or trade war would be. Thus far we’ve only seen nonmaterial changes to the tariff schemes of other countries that don’t really impact our business. Our toy business is not been part of the 303 designation that is currently been put in place. But we continue to monitor the situation and we continue to talk and firmly believe in a free trade environment as the best course for our company and for the industry.
For the full transcript of Hasbro’s earnings conference call, click here.