EL SEGUNDO, Calif. – Prices of Mattel Inc. toys like Barbie dolls and Hot Wheels cars have gone up as the company tries to compensate for increasing costs for materials such as resin and rising wages in China.
The world’s largest toy company, which sees input, labor and transportation costs rising in 2012, said on Tuesday that it had raised prices at a mid-single-digit rate on January 1 with the goal of keeping gross margins at around 50 percent.
The news came on the same day Mattel reported a higher-than-expected quarterly profit, sending its shares to their highest level since 1998.
“Nobody likes to take prices up,” said CEO Bryan Stockton. “Having said that, we’re all seeing the same kind of commodity increases, whether it’s in transportation costs, labor etc. So I think generally there is an understanding of the situation across the board.”
Stockton replaced long-time CEO Robert Eckert at the end of last year.
Mattel also set a first-quarter cash dividend of 31 cents a share, reflecting an annual payout of $1.24. That represents a 35 percent increase from last year.
While tight cost controls did boost the company’s profit in the fourth quarter, a stronger dollar and weakness in its Fisher-Price business hurt revenue in the period covering the Christmas selling season.
This year will be another when consumers and retailers will be “a little cautious,” Stockton said on Tuesday.