Mattel and Hasbro Shares Tumble After Warning About Holiday Toy Sales

Shares of Mattel (MAT) and Hasbro (HAS) plummeted in early trading on Thursday as the two toymakers warned of soft sales during the key holiday shopping season.

Mattel CEO Anthony DiSilvestro said the industry was dealing with “a challenging macroenvironment with higher volatility that may impact consumer demand.” The company indicated that it expects its full-year sales will be comparable to the $5.44 billion it made last year.

The news dampened some of the enthusiasm following a boom in demand for Mattel's Barbie dolls, fueled by the hit “Barbie” movie. Third quarter Barbie sales jumped 16% to $605 million, and helped Mattel post a 9% year-over-year revenue gain to $1.92 billion. Earnings per share (EPS) came in at $1.08. Both exceeded forecasts.

Hasbro reduced its full-year guidance as slowing toy demand cut into its sales. The maker of G.I. Joe and Power Rangers reported third quarter revenue from its Consumer Products Segment fell 18% year-over-year to $957 million, in part because of “soft industry trends.” Overall revenue dropped 10% to $1.5 billion, and EPS was $1.64. Both missed estimates.

Hasbro now projects full-year revenue declining 13% to 15%, with consumer products revenue to drop in the mid- to high-teens percent range. Its previous outlook was for a 3% to 6% slide in revenue. It anticipates earnings before interest, taxes, depreciation, and amortization (EBITDA) of $900 million to $950 million. Both the revenue and EBITDA outlooks were short of analysts’ expectations.

Shares of Hasbro were down close to 10% as of 12:30 p.m. ET, while shares of Mattel lost more than 7%.