Shares of Mattel (MAT) plummeted 5.42% in after-hours trading on Tuesday following the release of its disappointing third-quarter financial results. The toy manufacturer reported earnings that fell short of Wall Street expectations, primarily due to weakness in its North American market.

Mattel's third-quarter net sales came in at $1.736 billion, representing a 6% decrease compared to the same period last year and missing analyst estimates of $1.835 billion. Adjusted earnings per share were $0.89, significantly below the expected $1.07. The company's North American segment was particularly hard hit, with sales declining by 12%, while international sales managed to grow by 3%.

Despite the setback, Mattel's CEO Ynon Kreiz expressed optimism for the upcoming holiday season. "Since the beginning of the fourth quarter, orders from retailers in the U.S. have accelerated significantly and our POS is growing," Kreiz stated. The company maintained its full-year 2025 guidance, expecting strong topline growth in the final quarter of the year. Additionally, Mattel announced a licensing deal with Netflix for "KPop Demon Hunters" merchandise, potentially boosting future revenues. However, the market's immediate reaction suggests investors are more focused on the current earnings miss than future prospects.