Toy Industry Faces Holiday Hope and 2025 Growth Prospects Amid Softening Sales

Executive Summary:

In 2024, Mattel and Hasbro, the industry giants in the toy market, lowered their year-end sales forecasts but remain cautiously optimistic about a potential turnaround in 2025. Although the U.S. toy retail sector faced significant declines in recent years due to economic pressures like inflation and high consumer debt, Circana rsquo;s latest data shows a slowing in these declines, with year-over-year sales remaining stable.

While growth lags in major toy categories like dolls, outdoor play, and action figures, niche segments such as building sets, plush toys, and vehicles are performing well. Mattel rsquo;s CEO, Ynon Kreiz, emphasized the growing preference for experiential spending, which has impacted toy purchases. Yet, holiday season projections offer promise, with 43% of households with children intending to increase spending on toys. Surveys indicate that parents prioritize joy-inducing purchases for their children, even if it means reallocating budgets from other categories.

In response, Hasbro and Mattel are focusing on profitable revenue, reducing excess inventory, and capitalizing on high-demand products like Hot Wheels, Transformers, and new releases tied to popular franchises. Looking ahead, trends in ldquo;kidults rdquo; (adult toy buyers), educational toys, and thematic toys are expected to support a gradual industry resurgence