By Savyata Mishra
(Reuters) -Toymaker Mattel cut its annual forecast, reinstating it after two months, and posted a sharp drop in second-quarter revenue on Wednesday, as weak Barbie sales in North America and global trade uncertainties weighed on demand.
The Hot Wheels parent had pulled its sales and profit forecasts in May, when U.S. President Donald Trump’s shifting trade policy upended global supply chains and cast uncertainty over consumer spending trends.
CEO Ynon Kreiz told Reuters that timing shifts in retailer ordering patterns had an outsized impact on Mattel’s U.S. business during the second quarter. He expects that the company will recover most of its sales in the back half of the year.
Shares of Mattel were down 4.5% in volatile trading after the bell, as it also forecast lower 2025 gross margin compared to last year.
Mattel now expects a rise in 2025 net sales of 1% to 3%, compared to its February target of a 2% to 3% increase. It forecast adjusted per-share profit between $1.54 and $1.66, below its prior estimate of $1.66 to $1.72 apiece.
Adjusted gross margin is expected to be 50%, compared to 50.9% in 2024.
“We believe the slowdown is being impacted by the current trade environment and the company’s full-year margin guidance shows a larger-than-expected impact from tariffs,” CFRA analyst Zachary Warring said.
Analysts have warned that retailers such as Walmart, Target and Amazon.com were limiting building up inventory going into the key holiday season to minimize exposure to higher tariffs.
Earlier in the day, rival Hasbro raised its annual revenue outlook but warned that its U.S. customers had postponed their orders to later this year owing to tariff uncertainty.
In May, Mattel outlined plans to fully mitigate tariff costs in 2025 through a combination of price hikes and diversifying its supply chain.
“We estimate the tariffs exposure this year, based on current tariff levels, and before any mitigation actions, is less than $100 million,” Kreiz said on Wednesday.
Mattel reported a quarterly 6% drop in net sales to $1.02 billion, missing analysts’ estimate of a 2.7% decline to $1.05 billion, according to data compiled by LSEG.
The weakness was driven by a 16% fall in North America sales, primarily due to fewer new product launches for Barbie and delayed inventory decisions by retailers.
Adjusted profit came in at 19 cents per share, compared with the estimate of 15 cents apiece.
(Reporting by Savyata Mishra in Bengaluru; Editing by Alan Barona)
