Mattel Shares Plunge After Weak US Christmas Sales

SAN JOSE, California, Feb 11 (Bernama-dpa) -- Shares in US toymaker Mattel plunged by more than a quarter in after-hours trading on Tuesday after the company reported weaker-than-expected Christmas sales in the United States, reported German news agency dpa.

The stock fell by around 28 per cent in extended US trading. Mattel owns brands like Barbie and Hot Wheels.

Chief financial officer Paul Ruh said that while December sales in the US had increased, they fell short of the company's own expectations. 

He noted that price-conscious consumers had been seeking bargains and that retailers had been more cautious in building up inventories. In this environment, Mattel had resorted to discounts, which in turn weighed on profitability. Business outside the US developed as expected, Ruh said.

Mattel's quarterly profit fell by a quarter year-on-year to US$106.2 million, while revenue rose 7 per cent to just under US$1.7 billion.

In the US, there have been months of debate about whether consumers are cutting back on spending amid high living costs - and whether tariffs imposed on imports by President Donald Trump are playing a role.

However, rival Hasbro reported no difficulties during the Christmas period, despite raising prices in the US. 

Toy manufacturers traditionally produce much of their goods in Asia. Hasbro's current tariff rate stands at around 24 per cent, chief executive Chris Cocks told the Wall Street Journal. 

While Hasbro and its retail partners absorb some of the additional costs, part of the burden must still be passed on to consumers. "That's just the reality of living in a world with tariffs," the Hasbro boss said.

Hasbro produces toys including figures from Marvel, Transformers and Peppa Pig. In the Christmas quarter, its revenue rose 31 per cent year-on-year to just over US$1.44 billion. Net profit totalled US$201.6 million, compared with a loss of US$34.3 million a year earlier.

--BERNAMA-dpa