Toy giant Mattel has posted lower sales and profit for the third quarter amid poor performance in the North American market.

The Barbie maker saw net sales slide 6 per cent to $1.7 billion (down 7 per cent in constant currency) during the quarter ended September 30. This was driven by a 12 per cent drop in North America, partly offset by a 3 per cent increase in international markets. 

Gross margin fell to 50 per cent from 53.1 per cent in the year-ago period, which management attributed to unfavorable foreign exchange, inflation, tariff costs, and higher sales adjustments.

Operating income decreased 22 per cent to $380 million, and net income slid 25 per cent to $278 million.

Chairman and CEO Ynon Kreiz said the company’s US business was challenged by “industry-wide shifts in retailer ordering patterns” during the quarter.

However, he noted that orders from retailers in the country have accelerated significantly since the beginning of the fourth quarter.

“Looking into the balance of the year, we expect a good holiday season for Mattel and strong topline growth in the fourth quarter. 

“We are reiterating our full year 2025 guidance and are advancing our strategy to grow our IP-driven toy business and expand our entertainment offering,” Kreiz said.

Mattel expects net sales to increase 1-3 per cent for this fiscal year, while gross margin is forecast to decrease from 50.9 per cent to approximately 50 per cent.