Toymaker Mattel cuts annual revenue forecast as inflation drags demand

Mattel Inc lower its annual revenue forecast on Tuesday and stated it will ramp up promotions heading into the busy vacation season, as worth hikes discourage inflation-hit Individuals from spending on its Barbie dolls and motion figures.

Though demand for toys sometimes stays resilient throughout financial downturns, repeated worth will increase to fight rising prices of uncooked supplies, freight and labor have began to weigh on toymakers akin to Mattel and rival Hasbro Inc.

Mattel missed quarterly gross sales estimates for the primary time since March 2020, whereas Hasbro earlier this month tempered its full-year income outlook and warned that demand was beginning to slip forward of the festive season.

Mattel, in the meantime, expects demand to speed up through the essential vacation procuring season, however stated it will conduct extra promotions to stay aggressive.

“We’re within the midst of a difficult macroeconomic atmosphere, which equals volatility,” Chief Govt Ynon Kreiz advised Reuters.

Mattel lowered its 2022 adjusted revenue forecast to between $1.32 and $1.42 per share from $1.42 to $1.48 earlier, however its raised costs helped the toymaker publish adjusted gross margin of 48.3% within the third quarter, in contrast with final yr’s 47.8%.

General gross billings within the unit that makes Sizzling Wheels rose 12%, serving to partly offset a 4% decline within the North America phase pushed by declines in gross sales of Barbie dolls and motion figures.

Web gross sales fell marginally to $1.76 billion within the third quarter ended Sept. 30, lacking analysts’ estimates of $1.78 billion, in response to IBES information from Refinitiv.

The Fisher-Value toys maker reiterated its forecast for full-year gross sales.