MS Leisure: Takeaways from Call with CEO of One of the Largest Private Toy Companies

Research evidence excerpt

MS Leisure: Takeaways from Call with CEO of One of the Largest Private Toy Companies

UpdateMcontracted supply. Isaac noted tariff refunds are coming through slowly-

MGA has received less than 5% of paid tariffs back to date. On resin, higher

oil/resin prices have not yet hit MGA because they book resin a year in

advance by contract, suggesting this becomes more of a 2027 issue as

contracted supply rolls off. Isaac noted spot resin is up 30–40% vs. contract

today, but MGA's negotiations do not restart until September. Isaac believes

the industry will ultimately have to take additional pricing to offset higher

input costs.

3. Freight manageable in the US, while Europe is more exposed. Isaac noted

the US has not been meaningfully impacted by freight disruption, with

freight companies less able to push through price increases while Europe is

more pressured as route diversions drive higher costs.

4. Retailer appetite for toys constructive, but ordering remains cautious.

Isaac noted toys remain an important traffic driver for major retailers and

expects toy space to grow at big retailers in 2026 and potentially 2027,

primarily driven by collectible toys. That said, retailers are still exhibiting a

desire to chase demand, continuing to shift inventory risk to manufacturers.

5. Category growth remains highly bifurcated, with kidults, collectibles, and

innovation separating "haves" and "have nots.". Isaac framed the industry

as still growing given adult-driven demand, but not all companies are

participating equally. LEGO and Pokémon continue to dominate on broad

adult appeal and consistent engagement, while companies with weaker

innovation are more vulnerable.

6. Trading card demand durable, with retailers committing incremental

space to the category.