Why it's been a rough time for toy makers Mattel and Hasbro

It’s been a bit of a rough year for toy-making giants. Mattel, the company responsible for Barbie, has seen income decline for the past six quarters. Its stock has lost about one-fifth of its value this year, and this week another shareholder group urged the company to consider a sale. Meanwhile, Hasbro stock has lost 16% since February.

It’s not an industry-wide issue, however; it’s just that the legacy names have had a tough time keeping up with the trends this year.

“The challenge with the toy business is that it's always dependent on the whims of a 7-year-old,” said Chris Byrne, an independent toy industry analyst and consultant.

Arts and crafts (think Crayola) and collectibles (think Labubu or Pokémon) are what’s selling right now. Mattel and Hasbro aren’t leading those particular niches.

“This is what my pathetic high school football team used to call ‘a building year,’ I think, for both of them,” Byrne said.

Meanwhile, smaller companies can follow trends more quickly. Think of NeeDoh, the squishy fidget blob, and other viral sensory toys, said James Zahn, editor of the trade publication The Toy Book.

“A lot of the independent specialty retailers that we speak to on a regular basis are seeing upwards of 200-300% sales growth on that,” he said.

But Zahn said 2027 is likely going to be a better year for the big companies. Hasbro now has the Harry Potter license just as a new TV show is coming out.

“Conversely, Mattel did some big deals,” he said. “They're getting Teenage Mutant Ninja Turtles for the very first time. They're also getting the DC Comics license back.”

Zahn added that those nostalgic names are important for success, because the majority of the toy industry is actually grown-ups collecting for themselves.