EL SEGUNDO, Calif. - Toy maker Mattel Inc . (NASDAQ:MAT) reported better-than-expected third quarter earnings on Wednesday, as strong margins helped offset a slight revenue miss. Shares were up 1.8% in after-hours trading.
Mattel posted adjusted earnings per share of $1.14 for Q3, beating analyst estimates of $0.95. Revenue came in at $1.84 billion, just shy of the $1.86 billion consensus forecast and down 4% YoY.
While sales declined, Mattel expanded its gross margin by 210 basis points to 53.1%, driven by supply chain efficiencies and cost savings. This helped boost adjusted operating income to $504 million.
"We continue to execute on our multi-year strategy to grow our IP-driven toy business and expand our entertainment offering," said CEO Ynon Kreiz. "In line with our priorities this year, we continue to improve profitability, expand Gross Margin, and generate significant cash flow."
By category, Vehicles sales rose 12% YoY led by Hot Wheels, while Dolls revenue fell 14% due to declines in Barbie. Action Figures, Building Sets, Games, and Other increased 2%.
For the full year 2024, Mattel reaffirmed its adjusted EPS guidance of $1.35-$1.45, below the $1.44 consensus. The company now expects full-year revenue to be "comparable to slightly down" versus its prior outlook for comparable sales.
"We expect topline growth in the fourth quarter driven by a good holiday season, market share gains and a toyetic theatrical slate," Kreiz added.
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