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Toymakers Facing Holiday Challenge Due to Supply-Chain Issues

Supply-chain issues could make this Christmas season more challenging than normal for toymakers, a media report says.
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Supply-chain issues could make this Christmas season more challenging than normal for toymakers, a media report says.

Reuters polled some of the world's biggest toymakers about their outlook for the holidays. 

Logistics issues could mean some consumers leave stores with their gift lists less than filled as big retailers like Walmart  (WMT) - Get Walmart Inc. Report and Target  (TGT) - Get Target Corporation Report may not have the supply to meet demand. 

"There is more demand than we can supply," Isaac Larian, chief executive of toymaker MGA, told Reuters when discussing retail orders. 

Walmart and Target have hired their own cargo ships to secure the inventory they need as leading toymakers, including MGA, Kids 2 and Funko  (FNKO) - Get Funko, Inc. Class A Report, said they were using pricier cargo planes to import their toys. 

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Through the first seven months of the year, U.S. imports of dolls, toys and games, which Reuters calls a key slice of the toy market,  averaged $1.88 billion per month, a 50% increase from the comparable period in 2019. 

According to Jason Miller, associate professor of supply chain management at Michigan State University, the first seven months of 2021 are a record for toy imports when checking back to 2002. 

Mattel  (MAT) - Get Mattel, Inc. Report said in July that its supplies were disrupted when Covid-19 related port and plan shutdowns in April worsened shipping container shortages.

The El Segundo, Calif., toymaker nonetheless had reported first quarter results that topped estimates led by sales of its Barbie doll.

On a sharply lower day in the stock market, Funko shares fell 5.7% to $17.98 while Mattel gave back 1.7% to $20.04. Hasbro slipped 2% to $95.60. 

Among the giant retailers, Walmart eased 0.7% to $143.72 while Target shares fell 2.1% to $241.39.