What's Happening?
The U.S. toy market experienced a 7% increase in dollar sales from January to September 2025, according to a Circana analysis. This growth marks a recovery for a market that had been stagnant for two years. The surge is primarily driven by a 33% rise
in collectibles, including strategic trading card games, sports trading cards, and action figures. Additionally, licensed toys saw a 14% year-over-year increase, influenced by video games, movies, and sports-related toys. Despite concerns over tariffs, the toy industry remains resilient, with seven out of eleven tracked categories showing dollar growth.
Why It's Important?
The growth in toy sales highlights the resilience of the toy industry amid economic challenges such as tariffs. Toys serve as emotional anchors, providing joy and distraction, which may explain their steady demand. The industry's ability to adapt to trends like adult self-gifting and nostalgia further supports its stability. However, the sector remains vulnerable to tariffs, as a significant portion of toys are imported from China. The recent agreement between the U.S. and China to lower some tariffs could mitigate potential negative impacts on the industry.
What's Next?
As the holiday season approaches, the toy industry is poised for further growth, with companies like Toys R Us planning to open new stores. The willingness of U.S. consumers to absorb tariffs will be crucial in shaping the fourth quarter's performance. The industry's focus on trends such as digital wellness and nostalgia may continue to drive sales. However, the full impact of tariffs may not be realized until later, potentially affecting companies like Mattel, which has projected its tariff exposure to be below $100 million.
