Toy retailer reels from Trump tariffs, but is confident of turning a profit this year

President Donald Trump’s tariffs blizzard has thrown Oldham toy retailer, Character’s financial forecast into disarray – but the company said it still expects to achieve a profit in the current fiscal year.

Its stock market notice this morning said the recent unilateral imposition by the USA of trade tariffs on imports, particularly from China, and the escalating retaliatory measures being adopted have greatly impacted global economic stability in a very short space of time.

It said it’s board’s visibility for forecasting sales to the USA – which were approximately 20% of group turnover in the last financial year – and its ability to assess the financial implications for the group have been considerably obscured by these events.

Consequently, it added, the effect of the imposition of the trade tariffs will be felt in the second half by the group and, as a result, the company is withdrawing the market guidance for the year ending August 31, 2025.

Despite this, the board said it remains confident that the group will be profitable for the current financial year as a whole.

The review of the company’s first half results, which are due to be published in mid-May, is not yet complete, however, all indications at this time are that, in accordance with market expectations, the trading results to February 2025 will be in line with the first half performance in the prior year – first half 2024 profit before tax and highlighted items: £2.1m.

The company said it continues to have a strong balance sheet with healthy cash balances and the board is confident that it can “ride out this storm”.

The statement concluded: “As we gain a clearer picture of the global economic landscape emerging, we will update shareholders further.”

Character Group stocks brands such as Goo Jit Zu, Peppa Pig, Pokemon, Little Live Pets, Shimmer, SparklInstaglam, Stretch Armstrong, Fireman Sam and Scooby Doo.

Announcing its previous annual results last December, Character said the reception that its retail customers and distributors had given to the current portfolio, together with the brands and product lines it will be introducing in the autumn/winter 2025 product launches had been “very gratifying”.

However, it warned that the challenging and unpredictable conditions that persisted throughout much of the last financial year had continued into the current fiscal year.

It said with buffeting from political and macroeconomic developments, consumer confidence remains low, and this had adversely affected footfall in the high street and click-through from online marketplaces in the lead up to the key Christmas 2024 trading period.

Despite this, the group said it was encouraged by the resilience of its market share in the domestic markets and the prospects for growth in the international markets expected in Q4 of the current financial year.

Accordingly, the board said it expected sales and profit before tax and highlighted items for the full year ending August 31, 2025, to remain at similar levels to those reported in the year under review.

Earlier this week President Trump reined back on tariffs for most countries after, reportedly, being spooked by continuing falls in the Bond market.

He announced a 90-day pause on tariffs for most countries, those who he said had not retaliated against earlier tariffs, and introduced a blanket tariff of 10%, until July.

But he doubled down on China, whose tariffs he raised to 125% on Wednesday, leading to a total imposition of 145%, following China’s retaliatory tariffs.