Mattel Inc.’s share price hovered around $19 last week for a market value of $6.8 billion as the El Segundo-based toymaker reduced its full-year forecast for earnings, but held steady on revenue projections.
“We’re maintaining guidance for the full-year 2022 net sales growth in constant currency of 8% to 10%,” Chief Executive Ynon Kreiz told analysts during the company’s third-quarter earnings call on Oct. 25. “Yet, we do see a more challenging macroeconomic environment and increase volatility heading into the latter part of the year. As we expect higher pressure on gross margin, we’re revising guidance for 2022 adjusted EBITDA down slightly to (range of) $1.05 billion to $1.1 billion, representing growth of 4% to 9% versus 2021.”
Mattel’s previous guidance called for adjusted EBITDA of $1.1 billion to $1.13 billion. The anticipated range for earnings per share is now at $1.32 to $1.42, down from $1.42 to $1.48.
Kreiz said that in the fourth quarter, Mattel will have higher advertising costs and more promotions, and has “secured more shelf space and omnichannel retailer support compared to the prior year.”
He added that “2023 is shaping up well,” driven by the global rollout of Monster High, the return of Disney Princess and Frozen franchises, and the addition of Universal’s Trolls, as well as the global premiere of the Barbie movie. He stopped short of providing full-year guidance until the fourth quarter and full-year earnings are out.
“The guidance considers what the company is aware of today but remains subject to further market volatility, any unexpected disruption and other macroeconomic risks and uncertainties,” Chief Financial Officer Anthony DiSilvestro told analysts.
For the third quarter of this year, Mattel posted net sales of $1.75 billion, about the same as last year. Net sales in North America declined 3%, while the revenue from international markets increased 5% year over year.