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Toymakers’ Holiday Outlook Under Pressure From Tariffs, Layoffs
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Good morning, CFOs. The toy industry faces challenges; McKinsey changes how it elects leaders; and U.S. leading indicators show economic clouds gathering.
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The inflation rate for toys, games and play equipment rose 2.2% between April and May, according to data from the Toy Association. PHOTO: BRANDON BELL/GETTY IMAGES
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The outlook for the rest of the year isn’t rosy for toymakers. Ahead of second-quarter earnings, analysts and experts say the industry continues to face a challenging environment marked by accelerating layoffs, steep tariffs and cautious retailers—all of which are threatening profitability and increasing risk.
Roughly 60% of toymakers have executed layoffs in the past two months, according to Greg Ahearn, chief executive of the Toy Association, an industry trade group. “You can see the severity” hitting the industry, he said.
The cuts span from giants such as Hasbro, which last month laid off 3% of its global workforce in a cost-cutting push, to smaller companies like Lovevery. The company, which sells subscription-based play kits and learning programs, enacted a 20% staff reduction in May, just months after posting its first quarterly profit.
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Content from our sponsor: Deloitte
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Stablecoin Legislation Sets the Stage for Digital Payment Disruption
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New rules for payment stablecoins open opportunities for banks, non-banks, and other commercial entities to reimagine payments and innovate in a changing financial landscape. Read More
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📆 Earnings
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Coca-Cola
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D.R. Horton
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Equifax
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General Motors
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Halliburton
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Lockheed Martin
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MSCI
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Northrop Grumman
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Philip Morris International
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PulteGroup
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Sherwin-Williams
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Synchrony Financial
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Texas Instruments
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What Else Matters to CFOs
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McKinsey offices at 3 World Trade Center, New York. PHOTO: LANNA APISUKH FOR THE WALL STREET JOURNAL
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Exclusive: McKinsey is changing the way it picks its leaders for the first time in years in an effort to circumvent the internal tensions and infighting that marked its past two elections.
The elite consulting firm, as part of changes to its governance, will now elect a global managing partner to a single six-year term, and its partners will hold a confirmation vote at the four-year mark on whether the leader should serve the remaining two years of the term.
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37%
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Percentage of finance leaders who say they have paused some capital spending due to a mix of cost pressures, policy shifts and geopolitical risks, according to a survey by Gartner.
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The Securities and Exchange Commission, the Washington, D.C.-based securities regulator, named George Botic acting chair of the Public Company Accounting Oversight Board, effective July 23. Erica Williams last week said she planned to resign as chair on July 22 at the request of SEC Chair Paul Atkins. Botic, a certified public accountant, has served
as a PCAOB board member since October 2023. Prior to that, he was the director of the PCAOB’s inspections division.
Sensata Technologies, the Attleboro, Mass.-based industrial technology company, has named Andrew Lynch as CFO. Lynch, who joined the company in 2009, will have leadership and oversight of its global financial activities, Sensata said. Lynch, who was previously vice president of finance for Sensata's performance-sensing segment, stepped in as interim finance chief in May after Brian Roberts left to pursue other opportunities. Lynch will receive an annual salary of $540,000 per year as chief financial officer and will be eligible for an annual cash bonus with a target of 100% of his base pay.
—Colin Kellaher contributed to today’s Ledger.
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The Wall Street Journal's CFO Journal offers corporate leaders and professionals CFO analysis, advice and commentary to make informed decisions. We cover topics including corporate tax, accounting, regulation, capital markets, management and strategy.
Follow us on X @WSJCFO. The WSJ CFO Journal Team comprises reporters Kristin Broughton, Mark Maurer and Jennifer Williams, and Bureau Chief Walden Siew.
You can reach us by replying to any newsletter, or email Walden at walden.siew@wsj.com.
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