Mattel warns holiday sales will be lower than projected
Santa Claus is handing Mattel a lump of coal for Christmas.
The struggling California toy maker warned investors on Monday that its holiday sales will be lower than expected — by the mid-to-high single digits.
Last year, the maker of Barbie, Hot Wheels and Fisher-Price reported sales fell 3 percent in the holiday quarter.
As a result of the sluggish sales, the El Segundo company will write down inventory and offer deeper discounts to “clear inventory” this year, it said in a regulatory filing.
The drop in revenue comes despite an increase in advertising and promotion expenses compared with last year.
The grim forecast was followed by all three major rating agencies — Fitch, Moody’s and S&P — downgrading Mattel debt to junk status.
Mattel also disclosed in the filing that it plans to offer $1 billion in senior unsecured notes due in 2025.
Meanwhile, in November, rival Hasbro approached Mattel about a takeover, according to reports.
Mattel has been losing market share to its Pawtucket, RI, rival.
Shares of Mattel closed at $15.37, up 2.2 percent, Monday.