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Mattel was bullish on its outlook in the all-important holiday quarter, but cut its full-year earnings forecast as it acknowledged a tough macro environment would weigh on earnings.

The company, known for Barbie dolls and Hot Wheels toy cars, said it now expects adjusted earnings to fall in the range of $1.32 to $1.42 per share, down from 1. $42 to $1.48 previously, and said its adjusted gross margin would be around 47 percent. cent, at the lower end of earlier forecasts.

“We see an overall macroeconomic environment that is more challenging and could impact consumer spending,” chief executive Ynon Kreiz told the Financial Times.

Rival toymaker Hasbro reported last week that consumers have become more sensitive to higher prices, which has weakened demand and weighed on sales. Although Mattel has also raised prices for its products this year, Kreiz said that so far the company has not seen “a significant impact on consumer demand related to our toys.”

Mattel said net sales were flat from a year earlier at $1.75 billion in the three months ended Sept. 30, missing analysts’ forecast for revenue of 1. $78 billion.

Net sales in North America fell 3%, but this was offset by a 5% increase in sales in its international segment. Kreiz said retailers in the United States had accelerated their inventory purchases in previous quarters, which had helped leave North American revenues year-to-date up 10% from a year ago. one year old.

The company expects revenue and net income growth in 2023, but acknowledged in its earnings release “higher volatility, including inflation” in the challenging economic environment “could have a impact on consumer demand”.

Mattel’s reported earnings fell 64% from a year earlier in the third quarter or 80 cents a share, comfortably beating analysts’ estimates for 73 cents.