What happened

Pity Mattel (MAT -1.87%) investors. They just can't seem to catch a break.

Mattel stock is down 18% over the past year, underperforming the S&P 500 by about 30 percentage points. It's getting even worse today, with Mattel selling off 5.5% in early Tuesday trading, and still down about 4.7% as of 10:50 a.m. EST.

The question is, Why?

Shopping cart full of toys

Image source: Getty Images.

So what

And it's a very good question. I mean, there don't seem to be any negative analyst reports out on Mattel this morning. Neither has the company itself put out any negative-sounding press releases, or filed any surprises with the SEC.

And, of course, we're just coming out of the Black Friday/Cyber Monday sales cycle, which, as early as September, CNBC was reporting was supposed to be a good time for toymakers.

But here's the thing: It wasn't good, apparently -- or at least not good for Mattel in particular. No sooner had Black Friday flipped past in the calendar than analysts began warning that toy sales -- already down 5.5% from last year in 2019 -- were looking "pooped" and lacking "breakout hot product to drive traffic to stores or online," as The New York Post reported.  

Granted, MarketWatch has noted that some toys were hot sellers, including licensed Frozen 2 merchandise and Nerf guns.  

Now what

Problem is, Mattel doesn't make those toys. Hasbro does. And it seems investors, recognizing this, are beginning to worry that if the rumors are correct, Mattel won't succeed in reaching analyst forecasts for even a single penny in per-share profit this quarter.

Considering that last year, the company earned $0.04 per share in the Christmas quarter, earning that penny would mean a 75% decline in profit year over year. And now it's starting to seem that's the optimistic scenario -- it might not even happen. It looks to me as if investors are selling Mattel stock before their fears have a chance to become fact.