Barbie-maker Mattel (NASDAQ:MAT) posted fourth-quarter results after market close on Wednesday that came in well below Wall Street’s expectations after holiday sales failed to offset slowing consumer demand.
CFO Anthony DiSilvestro attributed the low performance to fewer orders from retailers and higher costs to manage inventory.
The company had hoped that the “all-important holiday season” would be a potential buoy for sales as demand has slowed amid inflation.
“Our fourth quarter results were below our expectations, as the macro-economic environment was more challenging than anticipated,” CEO Ynon Kreiz said in the Wednesday earnings announcement.
Adjusted earnings per share proved 18 cents vs. the expected 29 cents, on revenue of $1.40 billion vs. the expected $1.68 billion.
For the three months ended Dec. 31, the company reported net income of $16.1 million, or five cents per share, a plunge from $225.8 million, or 64 cents per share, a year earlier.
The toy manufacturing giant had been confident at the beginning of last year that it would continue to ride its pandemic momentum, driven by toy-buying parents trying to keep children at home entertained. It said it expected customers to be minimally fazed by price hikes as inflation and currency headwinds ramped up manufacturing costs.
But customers appeared to feel the squeeze as the company’s toys, like Barbie and Hot Wheels, become increasingly expensive, and the company’s fourth-quarter sales declined 22% year over year.
The company underperformed its own full-year earnings expectations, reporting 2022 earnings per share of $1.11. In October, the company cut its forecast to an expected range of $1.32 to $1.42.
Shares in MAT cratered $1.70, or 8.3%, to $18.80.