TOYMAKER Mattel on Tuesday forecast full-year profit above Wall Street expectations after beating holiday quarter estimates, owing to stable demand for its action figures and Hot Wheels vehicles, sending its shares up nearly 8 per cent after the bell.
The company expects 2025 adjusted profit per share in the range of US$1.66 to US$1.72, above analysts’ average estimate of US$1.58, according to data compiled by LSEG.
The forecast included potential impact of President Donald Trump’s sweeping tariffs on China, Mexico and Canada, announced on Saturday, which Mattel aims to mitigate through supply chain optimization and potential price increases on its toys.
“If tariffs squeeze consumers’ spending power, shoppers may hold off on discretionary purchases like toys. That said, Mattel is working to soften the impact,” eMarketer analyst Zak Stambor said.
Levies on Mexico and Canada were paused for a month while tariffs were being imposed on China, which retaliated with levies of its own.
“Our exposure in the US to China sourcing is about 20 per cent,” Mattel CEO Ynon Kreiz told Reuters.
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Currently, less than 40 per cent of Mattel‘s global product is manufactured in China, compared to an industry average of about 80 per cent, analysts have noted.
When it comes to pricing, CEO Kreiz said the company would work with its retail partners to find the right balance of quality and value at affordable price points.
Toy manufacturers have tried to get ahead of the incoming tariffs and reduce their exposure to China by shifting production out of the region and reviewing product lines.
Through 2024, the Barbie parent undertook stringent cost-control measures to protect its margins from sluggish demand.
On Tuesday, the company said it was tracking ahead of its target to achieve US$200 million in cost savings by the end of 2026 and plans to repurchase US$600 million of shares through 2025.
Mattel expects a net sales growth of 2 per cent to 3 per cent for 2025, slightly below analysts’ expectations of a 2.7 per cent rise to US$5.51 billion.
Weak Barbie sales and a shorter holiday season in December kept sales in check, with worldwide gross billings for dolls down 4 per cent in the fourth quarter ended Dec. 31.
Net sales rose 2 per cent to US$1.65 billion. Analysts on average had expected flat sales of US$1.63 billion.
It earned 35 cents per share on an adjusted basis, beating estimates of 20 cents. REUTERS
