How Hasbro's Meeting the Tariff Challenge

Supply Chain Challenges - The industry faces challenges in maintaining productivity initiatives to offset rising product costs, with over 80% dependence on China for sourcing among larger players [1] - Medium-sized and smaller players are experiencing significant disruptions due to this reliance on China [1] Supply Chain Diversification - Companies are working to diversify their supply chains, with a reduction from approximately 60-65% of toy and game volume sourced from China two years ago to around 50% as they enter 2025 [2] - The goal is to further decrease this dependence to roughly 30% by 2027, with growth in Southeast Asia, particularly in Vietnam and India, as well as in Eastern Europe and Eurasia, including Turkey and Indonesia [3] Quality and Vendor Development - Diversification is beneficial but requires time to develop vendors and suppliers, especially in terms of quality, which is crucial in the toy industry [4] - The process of building a new manufacturing base is not instantaneous, but it does not necessarily take five years to establish [4]