Despite being battered by tariffs and sporadic retail orders in the first three quarters of 2025, the US toy industry is finally showing signs of growth after two years of stagnation. But heading into the all-important holiday season, market research firm Circana is forecasting that the category will still face challenges, as US shoppers grapple with rising prices and political uncertainty while adopting new shopping habits. 

Here are some key takeaways from Circana’s latest year-to-date report:

US toy biz performance: Totalling US$16.9 billion, sales are up by 7% compared to the same period last year. The category’s average selling price rose by 4% to US$11.40, and total unit sales are up 3%. 

Primary growth drivers: This modest uptick in sales is driven by double-digit growth in collectibles (up 33%) and licensed toys (up 14%). Trading card games, sports cards and action figures were the leading SKU types for collectibles, while video games, movies and sports dominated in licensed products. 

YTD gains and drops: 

• Games & puzzles – up 42%
• Explorative & other toys – up 19%
• Building sets – up 12%
• Action figures & accessories – up 8%
• Youth electronics – up 6%
• Arts & crafts – up 3%
• Vehicles – up 1%
• Infant/toddler/preschool – down 2%
• Outdoor & sports – down 4%
• Plush – down 7%
• Dolls – down 7% 

September’s top-selling toys that are looking hot for the holiday season: 

• Pokémon Mega Evolution booster packs are the top-billed item in the games & puzzles category.
• The Super Mario Bros. Game Boy LEGO set is the new king of building sets.
• Spin Master’s Gabby’s Dollhouse The Movie Meowmazing Dollhouse is dominating in the preschool aisle.
• And Hasbro’s X-Men ’97 lineup has taken the lead in action figures. 

Holiday season forecast: Nearly half of all holiday shoppers plan to begin knocking items off their shopping lists before Thanksgiving. More than 80% of these consumers expect prices to be higher this year due to higher tariffs, and they are planning to prioritize affordable and meaningful purchases in order to stretch their budgets as much as possible. Consumers also expect to spend 3% more over the holidays this year, but 31% say they will buy fewer items overall. 

Executive outlook: “US consumers, and their willingness to absorb tariffs, will be the key factor shaping Q4 performance,” says Circana’s VP and toy industry advisor Juli Lennett. “The toy industry has a unique advantage and tends to be resilient in turbulent times [because] toys serve as emotional anchors for families. The industry also benefits from trends like adult self-gifting, nostalgia and digital wellness—factors that are expected to influence holiday purchases.”