Barbie's Big Quarter
Mattel Inc. (NYSE: MAT) posted much better than expected earnings. The owner of Barbie recently has proven that it can return to its spot as a major toymaker. While it continues to face challenges from companies that include Hasbro and Denmark’s Lego Group, it has started a resurgence.
Mattel’s third-quarter revenue rose 3% last quarter to $1.48 billion. While the growth rate is not substantial, it is in contrast to the company’s multiyear financial problems. Earnings per share jumped from $0.02 in the third quarter of last year to $0.20 in the most recent period.
Mattel’s results are broken out in pieces. The first is dolls, including Barbie. The others are infants and preschool, vehicles (which includes Hot Wheels), action figures and games. The star performer was dolls. The division’s sales were up 5% to $558 million. Sales of the iconic Barbie doll brand rose 10%.
Ynon Kreiz, board chair and chief executive, said that the news was confirmation that his turnaround of the company has worked and it has a bright future. He added, somewhat cryptically, that Mattel will take more advantage of its IP, which presumably means intellectual property.
Mattel also cleared a roadblock to its future expansion. A whistleblower alleged that the company had accounting irregularities. Mattel’s chief financial officer has left and past financials have been restated. The company praised CFO Joseph J. Euteneuer as he went out the door. Kreiz said, “Joe has been a valued member of our leadership team since joining Mattel two years ago.” An odd way to speak about the exit of a man who caused so much trouble.
The list of good news had Mattel stock up 19% to $12.49. Before that jump, shares were off 66% over the past five years. The turnaround has some ways to go. In the meantime, Barbie had a big quarter.