Toy giants Mattel and Hasbro have both decreased their end-of-year guidance ahead of the key holiday season as toy sales continue to slide during the third quarter. While earnings per share for both companies exceeded Wall Street expectations, revenue fell short, according to consensus estimates compiled by LSEG.
Mattel stated that it expects sales for the last three months of the year to be "comparable to slightly down" from its previous guidance update. On the other hand, Hasbro lowered its expected revenue guidance, now anticipating a decline of between 12% and 14% for consumer products, down from a previous forecast of a loss of between 7% and 11%.
The revised guidance comes at a crucial time as the holiday season approaches, with any softened results potentially having significant effects on retail companies such as Mattel and Hasbro. Hasbro's shares dropped more than 6% following the announcement, while Mattel saw a rise of over 4%.
The toy market, excluding building block sets, is expected to continue to see softened sales into the holiday season. Hasbro's CEO, Chris Cocks, noted during the earnings call that the industry is likely to see a decline of 2% to 5% overall, with the holiday season likely to follow that trend.
Despite the mixed outlook on holiday toy spending, overall spending is expected to increase throughout the season, according to the National Retail Federation. However, factors such as the upcoming presidential election and climate disasters may impact consumer behavior and priorities as the year comes to a close.