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Investing.com -- Mattel, Inc. (NASDAQ:MAT) shares dropped 3% after the toymaker reported second-quarter revenue that fell short of analyst expectations and lowered its full-year outlook amid challenging retail conditions.
The company posted adjusted earnings of $0.19 per share for the second quarter, beating the analyst consensus of $0.16. However, revenue declined 6% to $1.02 billion, missing the $1.06 billion analysts had expected and falling below the $1.08 billion reported in the same quarter last year. The revenue decline was primarily driven by a 16% decrease in North America, partially offset by a 7% increase in international markets.
Mattel also reduced its full-year 2025 guidance, now expecting adjusted earnings per share of $1.54 to $1.66, down from its previous forecast of $1.66 to $1.72. The midpoint of the new range falls slightly below the analyst consensus of $1.64.
"Our second quarter performance reflects operational excellence in the current macroeconomic environment as we continue to execute our strategy to grow Mattel’s IP-driven toy business and expand our entertainment offering," said Ynon Kreiz, Chairman and CEO of Mattel.
The company’s gross margin improved to 50.9%, an increase of 170 basis points compared to the prior year, while adjusted gross margin rose 200 basis points to 51.2%. This improvement was primarily driven by cost savings, lower inventory management costs, and favorable product mix.
By category, Dolls sales fell 19% YoY, with Barbie declining 25%. Infant, Toddler, and Preschool products dropped 25%. However, Vehicles grew 10%, led by Hot Wheels, and Action (WA:ACT) Figures, Building Sets, Games, and Other increased 16%.
CFO Paul Ruh noted, "Mattel’s adjusted EPS was the same as last year, despite global trade dynamics and timing shifts in retailer ordering patterns impacting our US business."
The company repurchased $50 million of shares during the quarter, bringing its first-half total to $210 million, and reaffirmed its 2025 share repurchase target of $600 million.