When you unlock a Hatchling, you’ll be able to choose an outfit for it. Additional outfits can be purchased with coins and yarn or by obtaining them from mystery chests. 

To view the outfit options for your Hatchlings, select a Hatchling in the Collection menu. The outfits available for the Hatchling will be displayed at bottom. You’ll see both the outfits you own as well as the outfits that are available for purchase. The outfits you do not yet have will display their coin and yarn prices.