Mattel Lowers Full-Year Outlook After Weak Quarter, Keeps Veteran Executive

what happened

Dow Jones Newswires reports that Mattel trimmed its annual guidance ahead of the crucial holiday season after third-quarter results fell short. Revenue rose 4.1% to $1.81 billion, below the $1.84 billion analysts expected, according to FactSet. The maker now sees net sales growth of 1% to 4% in constant currency, down from 3% to 6%, and adjusted earnings of $1.05 to $1.20 per share instead of $1.27 to $1.39.

Reported profit reached $353.6 million, or $1.23 a share, compared with $278.4 million, or 88 cents, a year earlier. Excluding one-time items, earnings came to $1.30 a share, against a forecast of 94 cents. Gross billings for Barbie fell 9% and Fisher-Price dropped 14%, while Hot Wheels rose 7%.

Steve Totzke, who left his role as president and chief commercial officer in May, returns as president and chief operating officer effective November 11. Roberto Stanichi, president and chief marketing and brand officer, is stepping down to join Netflix. Activist investors have criticized the falling share price and urged executives to explore a sale of the company.

why it matters

The sales miss and lower guidance point to slowing demand in the most important selling period for toy makers, which typically weighs on shares. Pressure from activist shareholders adds uncertainty about the company's strategic direction.

market impact

Mattel shares: weaker sales and a cut outlook put pressure on the stock

• ▼Mattel shares pressure down — a sales miss and lower guidance weigh on earnings expectations

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