By Bill Peters
Shoppers have yet to see the full impact of price increases on store shelves, one analyst says
Mattel reported quarterly results on Tuesday.
Mattel Inc. on Tuesday said it expects a decent holiday season, but shares still dropped after the toymaker’s third-quarter earnings report missed Wall Street’s expectations.
The results arrived as toymakers and retailers gear up for the key holiday-shopping stretch – and as they both try to cushion the impact of tariffs, which have made imports more expensive and threatened to push prices higher for inflation-weary consumers.
For the third quarter, Mattel reported sales of $1.74 billion. That was down 6% year over year, led by a drop in North America, and below FactSet analyst estimates for $1.83 billion. The company’s adjusted earnings per share came in at 89 cents, below forecasts for $1.06.
Mattel shares (MAT) dropped around 6% in after-hours trading Tuesday.
Chief Executive Ynon Kreiz said that since the start of the fourth quarter, orders from U.S. retailers had grown as stores try to stock up for the holiday season. So had point-of-sale trends and consumer demand overall.
“Looking into the balance of the year, we expect a good holiday season for Mattel and strong top-line growth in the fourth quarter,” he said.
Against that backdrop, Mattel said it was sticking with its full-year outlook. The company expects adjusted earnings per share of $1.54 to $1.66 for the full year.
Mattel’s results also landed as it tries to become more of a gaming and entertainment company, along with one that sells classic toys like Hot Wheels, Barbie dolls and action figures.
Netflix Inc. (NFLX) on Tuesday said it was partnering with Mattel and rival Hasbro Inc. (HAS) to roll out toys for “KPop Demon Hunters,” the streaming service’s megahit film. On Monday, Mattel said it had renewed a multiyear licensing agreement to make Disney’s (DIS) Princess and “Frozen” toys.
Some analysts expect holiday spending to cool slightly this season, as consumers stay selective on purchases and wrestle with tariff-related anxieties. In May, Mattel said it planned to raise prices in the U.S. “where necessary” as it grappled with the Trump administration’s trade wars.
During Mattel’s earnings call Tuesday, Kreiz said Mattel’s U.S. business during the third quarter was “challenged” by changes in the way retailers are ordering toys that shifted orders to the fourth quarter. More retailers, management said during the call, were opting to let Mattel handle imports and warehousing before taking in items – a more “just-in-time” approach to shipping, as retailers look for more flexibility in committing to orders.
UBS analyst Arpine Kocharyan said in a research note Monday that Mattel and Hasbro, as larger players in the toy industry, were in better shape than their rivals heading into the holidays. But she noted that the toy companies have largely acknowledged that shoppers have yet to see the full impact of price increases on store shelves.
Kocharyan said the industry was also running up against issues trying to move production out of China, a country that it has relied on for manufacturing and which the U.S. has targeted in its global trade war.
“The process of taking production out of China has been bumpier than anticipated for the industry,” she said.
“Buyers note supply-chain problems and issues with uninterrupted supply, while suppliers highlight disappointing production processes due to a lack of infrastructure in markets such as Vietnam and India and others,” she added.
-Bill Peters
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10-21-25 1942ET
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