Shoppers at a Walmart store on Black Friday in Secaucus, New Jersey, on Nov. 24, 2023.
Victor J. Blue | Bloomberg | Getty Images
Mattel and Hasbro decreased their end-of-year guidance ahead of the key holiday season as toy sales continue to slide during the third quarter.
Earnings per share for both toy giants beat out Wall Street expectations while revenue missed, according to consensus estimates compiled by LSEG.
But mixed results for both companies’ third quarters were reflected in the updated year-end guidance for 2024.
Mattel said it expects sales for the last three months of the year to be “comparable to slightly down” from its prior guidance update. Hasbro, meanwhile, lowered its expected revenue guidance. It now expects revenue to decline between 12% and 14% for consumer products, down from a previous guidance of a loss of between 7% and 11%.
The lowered guidance comes before the important holiday season, where softened results could have major effects for retail companies such as Mattel and Hasbro.
Shares for Mattel rose more than 4% on Thursday, while Hasbro dropped more than 6%.
Hasbro cut 1,100 workers last December after weak sales in 2023 continued into the holiday season, while Mattel was carried through by the success of the “Barbie” movie.
Aside from building block sets, Hasbro expects the toy market to continue to see a trend of softened sales into the holiday season.
“When you look at the toy industry, ex-building blocks, it’s effectively down on the lower end of low single digits to mid-single digits, so call it down 2% to down 5%,” CEO Chris Cocks said during Hasbro’s earnings call Thursday. “Our expectation is the holiday season will probably continue that trend. It will probably be down lower single digits.”
Cocks also said he expects the profit from building blocks, often advertised to toddlers, to potentially flatten out the toy market as a whole.
Mattel, meanwhile, maintained that the holiday season will contribute to top-line growth in the fourth quarter, along with “market share gains and a toyetic theatrical slate,” according to the company’s earnings report.
While the outlook on holiday toy spending is mixed, spending as a whole is expected to increase throughout the season from $979.5 billion to $989 billion, according to the National Retail Federation.
Spending may also be affected by the upcoming presidential election in November as the economy remains a top priority among voters, while climate disasters such as the multiple hurricanes that hit Florida may disrupt what people focus on toward the end of the year.