) reported third quarter 2012 earnings of $1.04 per share outpacing
the Zacks Consensus Estimate of 99 cents as well as the year-ago
quarter level of 86 cents. Solid performance in Other Girls brands
and margin expansion led to the beat.
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MATTEL INC (MAT): Free Stock Analysis Report
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During the quarter, net sales grew 4% year over year to $2,077.8
beating the Zacks Consensus Estimate of $2,076.0 million. Net sales
included an unfavorable foreign currency impact of 3 percentage
Worldwide gross sales were $2,273.7 million versus $2,183.2 million
in the prior-year period. U.S. gross sales increased 6% year over
year while international gross sales nudged up 2% year over year,
albeit an adverse currency impact of 9 percentage points.
Gross Sales for Mattel Girls & Boys Brands business unit
expanded 3% year over year to $1,371.1 million while the same for
Entertainment business plummeted 18%, attributed to a dip in the
Cars 2 movie property.
Sales for Other Girls Brands shot up 57% driven by Monster High.
Fisher-Price Brands sales climbed 6% to $790.4 million while the
American Girl line leaped 16% to $102.0 million.
Gross margin expanded 590 basis points (bps) year over year to
53.7% while operating margin improved 360 bps to 23.5%.
As of September 30 2012, Mattel's cash and cash equivalents were
$282.1 million compared with $254.5 million as of September 30,
2011. Long-term debt was $1,150.0 million versus $900.0 million in
the year-ago quarter.
The company's debt-to-total-capital ratio stood at 36.3% at the end
of the reported quarter. As of September 30, 2012, shareholders'
equity was $2.9 billion versus $2.4 billion as of September 30,
During the quarter, Mattel bought back 139,000 shares for
approximately $5 million.
The better-than-expected results for two successive quarters
delivered by Mattel inspire optimism around the stock. We remain
encouraged by the company's industry leading position, a favorable
calendar shift for the year 2012, the upcoming holiday season and a
strong product line up for the remaining part of the year.
However, increasing input costs, unfavorable shift in currency
exchange rate, tough retail environment amid a tepid economy and
the stiff competition are some causes of concern.
Mattel currently carries a Zacks #3 Rank, which translates into a
short-term 'Hold' rating. We reiterate our long-term 'Neutral'
recommendation on the stock.
One of Mattel's closest competitors,
) is slated to report its third quarter 2012 results on October 22,