Barbie sales helped
Mattel
barrel past third-quarter expectations. But the stock plummeted double-digits in premarket trading Thursday after the company said toy demand was slowing into the holiday season.
The toy maker posted adjusted earnings of $1.08 a share, while the consensus call among analysts tracked by FactSet was for 86 cents. Sales of $1.92 billion were up 7% year over year in constant-currency terms, while Wall Street had expected $1.84 billion.
Gross billings for dolls rose 24% in constant currency compared with the previous year, Mattel (ticker: MAT) said, driven by growth in Barbie, Disney Princesses, and Monster High.
“Our results benefited from the success of the Barbie movie, which became a global cultural phenomenon, and marked a key milestone for Mattel,” said CEO Ynon Kreiz.
The company also raised its guidance for the fiscal year. It now expects adjusted earnings per share to range between $1.15 and $1.25, higher than past projections for $1.10 to $1.20. Analysts were forecasting earnings of $1.20 a share.
But the bottom-line raise wasn’t enough for investors. The company didn’t raise its revenue forecasts, which was weighing on the stock Thursday. Mattel continues to expect full-year revenue to be comparable to fiscal 2022. Indeed, outside of Barbie, the company saw sales declines for some of its other products, including action figures, games, and infant and toddler products.
Perhaps more damning for the stock, Mattel’s management said it sees a tough environment for toy sales headed into the holidays. The company expects industry sales to decline by mid-single digits for the full year, Kreiz said on a call with investors, slightly worse than previous calls for a modest decline.
“We are operating in a challenging macroeconomic environment with higher volatility that may impact consumer demand,” added Anthony DiSilvestro, Mattel’s chief financial officer.
That said, Mattel is “well-positioned competitively,” Kreiz said, and continues to expect a strong holiday season on its end.
Shares of Mattel fell 11% to $17.89 in premarket trading Thursday. Competitor
Hasbro
(HAS) fell 13%.
Hasbro
on Thursday slashed its full-year guidance, citing a “softer toy outlook.”
Write to Sabrina Escobar at [email protected]
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