Shares of Mattel, Inc (NASDAQ:MAT) were down nearly 2.6% on Wednesday afternoon after the toy company reported a decline in third-quarter earnings.
US retailer ordering patterns weighed on sales, Mattel said, though the toymaker said consumer demand remains strong and it expects a robust holiday season.
Net sales fell 6% to $1.74 billion, or 7% in constant currency. Net income dropped $94 million to $278 million, while earnings per share came in at $0.88, down from $1.09 a year ago.
Adjusted earnings per share were $0.89 versus $1.14 in the prior-year period.
Gross margin decreased 310 basis points to 50.0%, with an adjusted gross margin of 50.2%, down 290 basis points. Operating income fell $108 million to $380 million, while adjusted operating income was $387 million, a decrease of $117 million.
CEO Ynon Kreiz said the company faced “industry-wide shifts in retailer ordering patterns” in the US but highlighted strong consumer demand across all regions.
“Since the beginning of the fourth quarter, orders from retailers in the US have accelerated significantly and our POS is growing,” Kreiz said. “Looking into the balance of the year, we expect a good holiday season for Mattel and strong topline growth in the fourth quarter.”