When you invest in stocks, part of how the stock will perform is based on expectations. The company offers guidance or what it should do and then reports on how well it did or actuals. If it did better than expected, the market says YEA! and the price tends to go up, if it did not then the price tends to go down as allocation happens – shifting from one stock to another.

In a report from Mattel, the large toymaker which has it headquarters and design staff in the US but essentially makes most of its toys in China. It is a bell weather stock on President Trump’s tariffs. How does the company adjust to tariffs? Do it bring manufacturing to the US? Mattel sells to the giant retailers, what are they doing about tariffs?

Mattel reported weak Barbie sales in North America (President Trump said a girl can have 3 or 4 dolls not 30) and cautious inventory planning by retailers amid global trade uncertainties weighed on demand.

Mattle expects a 1% growth rather than a 2-3% growth. It is still making profits, just less, its prior estimate was $1.66 to $1.72 but changed the estimate to $1.54 to $1.66.

Mattel’s finance chief Paul Ruh said retailers such as Walmart, Target and Amazon were limiting building up inventory going into the key holiday season to minimize exposure to higher tariff rates.

Mattel had fewer new product launches for Barbie and worldwide gross bills for dolls fell 19%, while the infant, toddler and preschool category dropped 25%.

Mattle had net sales of $1.02 billion for the quarter just less than the $1.05 billion which was expected.

Linking to dividend paying stocks, sometimes companies can do everything right from their perspective and still not perform to expectations, but that is why they have plans to do something which they can control. As an investor, you have to determine if what the company’s plans are is something you want to be on the ride with them. Sometimes the answer is yes, sometimes it is no for it depends on the company.

There are more questions than answers, till the next time – to raising questions.