The report comes after the toymaker cut its full-year outlook last quarter, citing elevated market volatility. It had hoped that the “all-important holiday season” would be a potential buoy for sales.
“Our fourth quarter results were below our expectations, as the macro-economic environment was more challenging than anticipated,” CEO Ynon Kreiz said in the Wednesday earnings announcement.
Here’s how Mattel performed in the fourth quarter, compared with what Wall Street anticipated, based on an average of analysts’ estimates compiled by Refinitiv:
Adjusted earnings per share: 18 centsRevenue: $1.40 billion vs $1.68 billion expected
For the three months ended Dec. 31, the company reported net income of $16.1 million, or 5 cents per share, a plunge from $225.8 million, or 64 cents per share, a year earlier.
Shares of Mattel were down 9% in after-hours trading on Wednesday.
The toy manufacturing giant had been confident at the beginning of last year that it would continue to ride its pandemic momentum, driven by toy-buying parents trying to keep children at home entertained. It thought customers would be minimally fazed by price hikes as inflation and currency headwinds ramped up manufacturing costs.
But customers did feel the squeeze as the company’s toys, like Barbie and Hot Wheels, become increasingly expensive, resulting in flat third-quarter sales.
As consumer demand slows from its pandemic highs, Mattel has been working to diversify its revenue streams, using the intellectual property of its toy brands for non-manufacturing ventures.
Its “Barbie” movie starring Margot Robbie and Ryan Gosling is scheduled for a July 21 release. The company has a dozen other feature films in the works for brands like Hot Wheels, Polly Pocket, Barney, and more.
The project is a part of Kreiz’s larger strategy to transition Mattel from purely a toy manufacturer to a multi-segmented house of toy franchises.