Mattel CEO Says Toy Biz Is Defensive but Expects Late Shopping Surge

While acknowledging the broader economic obstacles facing his company along with others, Mattel’s CEO says he’s counting on demand for toys for the holidays.

“While we’re seeing higher volatility related to macroeconomic challenges that may impact consumer spending, the toy industry has historically demonstrated its resilience during difficult economic times and is forecast to grow for the full year and thereafter,” Ynon Kreiz said during an earnings call Tuesday (Oct. 25).

Kreiz said during the presentation that the toymaker’s quarter-to-date point-of-sale (POS) numbers were in keeping with expectations.

“It’s also worth noting that shoppers are returning to traditional purchasing patterns closer to the holiday season, so we expect to see POS accelerating and outpace shipping,” he said.

Mattel said its net sales were flat, rising 3% in constant currency, which made this its ninth growth quarter in a row. Year to date, net sales were 10%, and 13% in constant currency.

Last week, rival toy/game maker Hasbro — which now bills itself as a “branded entertainment” company — reported a 15% drop in revenue and retraction in all three of its now diversified business units. That situation has left the brand facing the prospect of ending the year — and its most crucial quarter — with flat sales.

“We’ve seen the average consumer become increasingly price sensitive as the year has progressed,” CEO Chris Cocks said during an earnings call. “Promotions and entertainment field demand have become increasingly important and will be key in the quarters ahead,” he added, before pointing to mid-double-digit sales volume.

Amazon sold 8 million toys — along with 92 million-plus other items — during its Prime Early Access Sale earlier this month.

Read more: Retailers Race to Respond as Consumers Recoil From Inflation

However, PYMNTS has noted recently that millions of consumers have begun cutting back on spending in preparation for a recession that — depending on who we surveyed — has either begun or is now unavoidable.

Of those most concerned about runaway inflation leading to recession, the study says, consumers in rural locales, people living paycheck to paycheck and bridge millennials are even more pessimistic. The study found 70% of rural consumers, 78% of those living paycheck to paycheck with issues paying bills and 71% of bridge millennials say they are very or extremely worried about the economy in the short term.

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