(Reuters) -Mattel missed Wall Street estimates for third-quarter revenue and profit on Tuesday, as retailers worried about an uncertain economic outlook delayed orders for “Barbie” and other toys, sending its shares down about 7% in extended trading.
The company’s CEO, Ynon Kreiz, said that its U.S. business faced challenges in the quarter due to industry-wide shifts in retailer ordering, with many moving from domestic imports to direct shipping to allow more time for holiday-season decisions.
Several consumer-facing companies and retailers are seeing persistent sales declines as Trump administration’s unpredictable trade policies disrupt business operations and drive thriftier consumer behavior.
Quarterly sales in Mattel’s North America segment, the biggest revenue-contributing region, fell about 11.7%, compared to a decline of 3.4% a year ago.
U.S. President Donald Trump’s recent threat to impose 100% tariffs on Chinese imports has fanned fresh concerns among experts who flag a further escalation in prices and pressure on demand ahead of the crucial shopping season.
“Tariffs are clearly impacting Mattel and other toy makers and if the newly announced 100% tariffs go into effect, it will have a much larger impact to gross margins,” Zachary Warring, analyst with CFRA Research, said.
Mattel, which expects China to make up less than 40% of its production by 2025, is diversifying its supply chain and optimizing products to mitigate tariff costs.
The company’s quarterly net sales of $1.74 billion missed the analysts’ average estimate of $1.83 billion, as per data compiled by LSEG.
Its third-quarter adjusted profit of 89 cents per share also came in largely below estimates of $1.07 apiece.
Mattel’s quarterly adjusted gross margin declined to 50.2% from 53.1% a year ago due to impacts from inflation as well as tariff costs.
The company maintained its annual outlook and expects a strong fourth quarter as retailers restock ahead of holiday demand.
“I believe that the U.S. toy industry will continue to see strength at retail, provided consumer confidence remains steady heading into November,” James Zahn, editor-in-chief of the Toy Book, said.
Earlier on Tuesday, Netflix announced a licensing deal with Mattel and Hasbro to launch themed merchandise globally starting in 2026 across categories like dolls, action figures and collectibles.
(Reporting by Anuja Bharat Mistry in Bengaluru; Editing by Alan Barona)
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