MW Mattel sees 'good' holiday season but stays cautious on outlook

By Bill Peters

Mattel said its U.S. business was 'challenged' as retailers change up toy orders and shoppers remain cautious

Shoppers have yet to see the full impact of price increases on store shelves, one analyst said.

Mattel Inc. on Tuesday said it expects a "good" holiday season, but that didn't do much for the toymaker's full-year forecast, and shares dropped after the company's third-quarter results missed Wall Street's expectations.

Shares fell 4.2% after hours on Tuesday.

Those results arrived as toymakers and retailers gear up for the key holiday shopping stretch - and as they try to cushion the impact of tariffs, which have made imports more expensive.

In Mattel's $(MAT)$ earnings release, Chief Executive Ynon Kreiz said the company's U.S. business was "challenged" in the third quarter, as retailers recalibrate the way they order toys and other products to deal with tariffs and cautious consumers.

But he said that during the fourth quarter, those orders, at least in the U.S., had increased. And he said point-of-sale trends were growing.

"Looking into the balance of the year, we expect a good holiday season for Mattel and strong topline growth in the fourth quarter," he said. "We are reiterating our full year 2025 guidance and are advancing our strategy to grow our [intellectual property]-driven toy business and expand our entertainment offering."

Mattel said it expects adjusted earnings per share of $1.54 to $1.66 for the full year.

For the third quarter, Mattel reported sales of $1.74 billion, down 6% year over year and below FactSet estimates for $1.83 billion. The company's adjusted earnings per share came in at 89 cents, below forecasts for $1.06.

UBS analyst Arpine Kocharyan said in a research note on Monday that Mattel and rival Hasbro Inc. $(HAS)$, as larger players in the toy industry, were in better shape than their rivals heading into the holidays. But she said the toy companies have largely acknowledged that shoppers had yet to see the full impact of price increases on store shelves.

She 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 that 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 said.

-Bill Peters

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October 21, 2025 17:03 ET (21:03 GMT)

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