Mattel Not Playing Around With Q4 Earnings

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When Mattel Inc. (NASDAQ: MAT) reported its fourth-quarter financial results late on Thursday, the toymaker said that it had a net loss of $0.72 per share and $1.61 billion in revenue. The consensus estimates from Thomson Reuters had called for earnings of $0.17 per share on revenue of $1.74 billion. In the same period of last year, the company said it had $0.52 in earnings per share and $1.83 billion in revenue.

For the full year, the reported loss per share was $3.07, which was negatively affected by a net noncash charge of $457 million related to a valuation allowance on U.S. deferred tax assets from U.S. tax reform.

One of the highlights from the report was that the company saw the strongest brand growth in Barbie, up 9%. In fact, the Barbie brand delivered its third year in a row of mid- to high-single-digit point of sale (POS) growth globally. Despite the strength in this brand, sales still slumped.

In terms of its segments, Mattel reported fourth-quarter numbers as follows:

  • Worldwide gross sales for Fischer-Price Brands were $533.8 million, down 12% as reported, and down 14% in constant currency, versus the prior year’s fourth quarter, primarily driven by declines in infant and preschool products and Thomas & Friends.
  • Worldwide gross sales for American Girl Brands were $217.3 million, down 23% as reported and in constant currency, versus the prior year’s fourth quarter, primarily driven by lower sales across channels.
  • Worldwide gross sales for Construction and Arts & Crafts Brands were $93.5 million, down 25% as reported, and down 26% in constant currency, versus the prior year’s fourth quarter, primarily driven by declines in MEGA BLOKS licensed and preschool products.

The company did not issue any guidance in the report, but the consensus estimates call for a net loss of $0.31 per share and $731 million in revenue for the fiscal first quarter.

Margo Georgiadis, CEO of Mattel, commented:

We have taken aggressive action to enter 2018 with a clean slate so that we can reset our economic model and rapidly improve profitability. We are optimistic about stabilizing revenue in 2018 anchored by our key power brands, entertainment partnerships and exciting new launches. We continue to gain momentum toward the medium-term goals we shared at our June Investor Day.

Shares of Mattel traded up about 10% at $16.80 on Friday, with a consensus analyst price target of $15.58 and a 52-week range of $12.71 to $26.80.