Wicked, Hot Wheels drive sales as Mattel preps price hikes
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Welcome to Seeking Alpha's Wall Street Breakfast, where we cover the top news for investors every morning. Thanks for joining us on this Tuesday, May 6th. I'm Julie Morgan. Mattel has a strategy to deal with tariffs and it involves you. Google Eyes the big screen and Rite Aid files again.

Mattel is down one half of one percentage point in pre-market action after topping Q1 expectations and pausing its full-year guidance. Net sales were up 2% year-over-year to $827 million in Q1, or 4% on a constant currency basis.

The increase in net sales, as reported, was driven by a 3% increase in North America and a 1% increase in the international business. Worldwide gross billings for the dolls category were up 1% to $297 million, or 2% in constant currency, primarily driven by growth in Disney Princess and Wicked.

Worldwide gross billings for the infant, toddler, and preschool category were down 6% to $126 million, primarily due to declines in baby gear and power wheels. Worldwide gross billings for the vehicles category were up $308 million, up 4% as reported, primarily driven by growth in hot wheels.

Meanwhile, worldwide gross billings for the action figures, building sets, and other categories were up 12% to $193 million, driven by growth in action figures partly offset by a decline in building sets.

Mattel paused its 2025 guidance until it has greater visibility on the tariff scenario. However, the company outlined the tariff mitigation strategies it is deploying, including accelerating diversification of its supply chain and further reducing reliance on products from China. In addition, the big holiday season is months away, but the toy company mentioned it is taking pricing action in its U.S. business where necessary.

Shares of Mattel fell 3.1% in post-market trading on Monday after shedding 1.1% during the regular session.

Google has its eye on Hollywood as the tech giant has quietly launched a new film and TV production initiative called 100 Zeros. Business Insider reported that the initiative is a multi-year partnership with Range Media Partners, a talent management and production company whose notable work includes the 2024 movie about Bob Dylan, A Complete Unknown.

100 Zeros has been tasked with identifying projects that Google can help fund or produce with the aim of potentially supporting scripted and unscripted films and TV shows. Back in April, Google announced a partnership with Range Media for a program called AI on Screen to commission short films about the relationship between humanity and AI. The first two films, Sweetwater and Lucid, are set to release later this year.

Product placement is not the main focus of 100 Zeros, although the initiative could help promote Google's newer tech products and services. The initiative's goal is to sell projects to traditional studios and not to leverage YouTube as a primary distribution platform, nor to recreate the platform's efforts to make original shows.

After being cleared by a judge to exit bankruptcy in June of 2024 as part of a restructuring plan, Rite Aid has begun Chapter 11 bankruptcy proceedings for a second time. The drugstore chain has worked with its current lenders to assess $1.94 billion in new financing, enough to support the company during the sale process. Rite Aid said it has been in active discussions with multiple interested potential acquirers.

The CEO, Matthew Schroeder, told employees in a letter obtained by Bloomberg that the drugstore chain has been unable to secure additional funding to continue operating. Job cuts are slated at its corporate HQ in Pennsylvania. Schroeder wrote in the letter that the reduction is due to the dramatic downturn in the economy, along with tariffs and increased costs from suppliers.

Rite Aid formally exited its prior bankruptcy in September 2024. Now for a look at the trending articles that you can find on Seeking Alpha. DoorDash is set to buy UK food delivery firm Deliveroo for $3.9 billion. Ford falls after pulling its full-year guidance and warning of a $1.5 billion tariff hit.

And India reportedly proposes a zero-for-zero tariff deal on U.S. auto parts and steel. On our Catalyst Watch for the Day, the three-day Stripe session event will begin in San Francisco. Notable speakers include Stripe CEO Patrick Collison and Meta Platform CEO Mark Zuckerberg. Shareholders of Varan and Whitecap Resources will vote on the planned merger between the companies.

And Advanced Micro Devices will hold its earnings conference call at 5 p.m. Analysts have the call circled for having the potential to take the sting off the Q1 report. Options trading implies a share price move of 9% after the report is released.

We've made it to that time of the morning when we take a look at the markets ahead of the opening bell. Dow, S&P and Nasdaq futures are in the red. Crude oil is in the green up 2.8% at $58 a barrel. Bitcoin is down 0.6% at $94,000. Gold is up 1.2% at $3,376.

In the world markets, the FTSE 100 is down 0.2% and the DAX is down 1.4%. Upwork is on our list of the biggest movers of the day pre-market. UPWK is up 12% after the company beat Q1 expectations. On today's economic calendar, it's the first day of the FOMC meeting and at 8.30 a.m., International Trade in Goods and Services. ♪

That's it for today's Wall Street Breakfast. Thanks for listening. To take full advantage of Seeking Alpha with coverage on significant stocks and ETFs, become a premium subscriber. Check out seekingalpha.com slash subscriptions. I'm your host, Julie Morgan. Go out and make it a great day.