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The $450 billion tariff-related elephant in the room is weighing on many consumer products. That includes cuddly children’s toys.
“[Tariffs are the] question of the moment right now,” Build-A-Bear Workshop (BBW) CEO Sharon Price John told Yahoo Finance Executive Editor Brian Sozzi on the Opening Bid podcast (see the video above or listen below).
John says tariffs could lead to higher prices for the “furry friends” she sells to parents and collectors.
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John is a toy company C-suite veteran. She is currently chair of the Toy Association and has spent 12 years helming Build-A-Bear. The retailer — which operates 596 stores, mostly in the US — is known as a place where patrons of all ages can create customized stuffed animals using bespoke materials, among other things.
During the first go-round of Trump-related tariffs, the company and its peers sought to pivot to keep things running profitably.
“Six years ago, we started the diversification process for our supply chains because there were discussions of tariffs in the previous administration with President Trump,” she said. “The vast majority of our products were sourced from China at that time.”
The company reduced its product sourcing footprint in China at that time — a move that has lasted. “Now it’s less than half,” she said of products sourced from China. “So we do have some diversification in our supply chain.”
Read more: What Trump’s tariffs mean for the economy and your wallet
Even so, the newest round of proposed tariffs has retailers and consumers alike feeling skittish.
In the toy space, an estimated 80% of items are sourced in China, according to the Toy Association. In light of proposed tariffs, Toy Association CEO and president Greg Ahearn forecast costs could rise 15% to 20% by this year’s back-to-school season.
Ahead of this tumultuous backdrop, Build-A-Bear has reported several quarters of strong outperformance.
It reported record quarterly results earlier this month, with positive earnings per share and revenue surprises alongside plans to open 50 new locations globally in 2025. John noted on the company’s earnings call that 2024 marked its “fourth consecutive year with record results.”
Still, the topic of looming tariffs turned up in the report. “Even in our guidance, we did contemplate what we believed would be the tariffs at the time,” she said. “Estimation is hard because a lot of these products are made one in one country, one in a different country.”
