Toymaker Mattel braces for dull holiday demand | Inquirer Business

Toymaker Mattel braces for dull holiday demand

/ 07:44 AM October 26, 2023

Mattel's Barbie dolls on display at a store in Manhattan

Barbie dolls, a brand owned by Mattel, are seen at the FAO Schwarz toy store in Manhattan, New York City, U.S., Nov 24, 2021. REUTERS/Andrew Kelly/File photo

Mattel on Wednesday warned of slowing demand for the toy industry heading into the crucial holiday season, taking the shine off its bumper third-quarter results driven by the “Barbie” movie’s box-office success.

The company’s shares fell about 8 percent in extended trade after the toymaker reiterated that its annual net sales forecast would be “comparable” to last year’s figures of $5.44 billion.


“We are operating in a challenging macroeconomic environment with higher volatility that may impact consumer demand,” said CFO Anthony DiSilvestro on a post-earnings call.


A majority of the expected $125 million benefit from the “Barbie” movie to full-year sales was reflected in Mattel’s third-quarter results, which handily beat market expectations.

“While the movie will have likely cast some glow on Barbie sales in Q4, the company’s decision to maintain (sales) guidance suggests that it expects some near-term headwinds ahead,” said Zak Stambor, senior analyst at Insider Intelligence.

READ: Mattel posts a surprise profit as Barbie sales fall despite movie hype

Even though Mattel shrugged off concerns around inventory destocking from retailers as it heads into the key holiday period, shopping is expected to be downbeat as crimped household budgets weigh on big-ticket purchases.

Still, the company expects consumer demand for its dolls and toy vehicles such as the Hot Wheels brand to outperform broader softness in the toy industry.

“We expect to see an accelerated growth rate in the fourth quarter with significant gross margin expansion,” CEO Ynon Kreiz told Reuters.


Mattel also raised its annual adjusted earnings per share forecast to between $1.15 and $1.25, banking on the margin benefit from the “Barbie” movie.

Its adjusted per-share profit of $1.08 beat analysts’ estimate of 86 cents, according to LSEG data.

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Rival Hasbro will report third-quarter results on Thursday.

TAGS: holidays, Mattel, weak demand

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