) posted dismal fourth quarter and full year 2013 results.
Adjusted earnings of $1.07 per share were down 4.5% year over
year. The figure also missed the Zacks Consensus Estimate of
$1.20 by 10.8%. The downside reflects weak sales and higher
advertising and promotion expenses.
During the quarter, net sales declined 6.3% year over year to
$2.11 billion, primarily reflecting poor performance in the
domestic market. Sales of brands including Barbie and
Fisher-Price dropped during the holiday season. Sales also missed
the Zacks Consensus Estimate of $2.38 billion by 11.0%.
Gross sales from North America (including the U.S., Canada and
American Girl) were down 10.0% year over year compared to an
increase of 3.0% in the previous quarter due to weakness in the
U.S. International gross sales were flat year over year compared
to an increase of 9.0% in the previous quarter.
Mattel's product segments comprise Mattel Girls & Boys
Brands, Fisher-Price Brands and American Girl Brands.
Worldwide gross sales at Mattel Girls & Boys Brands declined
4.0% year over year to $1.35 billion. However, it increased 8%
during the previous quarter. Worldwide gross sales of the Barbie
brand declined 13.0%, whereas gross sales of the Other Girls
Brands surged 12.0%, thanks to Disney Princess. Gross sales of
the Wheels category declined 11.0% while the Entertainment
business plunged 6.0% due to lower sales of Radica and Games.
After remaining flat year over year in the previous quarter,
sales at Fisher-Price Brands, which includes Fisher-Price Core,
Fisher-Price Friends and Power Wheels brands, declined 13.0% year
over year to $647.4 million.
Gross sales at American Girl Brands were up 3.0% year over year
to $331.6 million driven by Saige, the 2013 Girl of the Year.
However, it was far below growth of 20.0% in the previous
Gross margin was up 20 basis points (bps) to 54.5%, driven by
decline in cost of sales. Operating margin remained flat year
over year at 22.7%.
Full Year 2013 Highlights
Adjusted earnings per share in full year 2013 went up 4.5% year
over year to $2.58, but missed the Zacks Consensus Estimate of
$2.74 by 5.8%. Revenues were $6.48 billion, up 1.0% year over
year but missed the Zacks Consensus Estimate of $6.73 billion by
Share Buyback Activity & Dividend
During the fourth quarter, Mattel repurchased 2.0 million shares
worth $83.0 million. Also, the board declared a cash dividend of
38 cents per share that that translates into an annualized
dividend of $1.52 per share and represents an increase of 6.0% to
year over year.
Mattel's top and bottom line failed to beat our expectation
during the reported quarter on weak consumer spending. The
sluggish performance reflects that consumer spending uncertainty
still lingers amid sluggish economic growth in the U.S as
customers curb their non-essential purchases.
The company presently has a Zacks Rank #4 (Sell). Other toy
makers such as,
Glu Mobile, Inc.
LeapFrog Enterprises Inc.
), are slated to report quarterly earnings soon. While Hasbro
will report on Feb 10, Glu Mobile and LeapFrog will likely report
on Feb 5 and Feb 12, respectively.
GLU MOBILE INC (GLUU): Free Stock Analysis
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MATTEL INC (MAT): Free Stock Analysis Report
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