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Dismal Power Brands Sales to Hurt Mattel (MAT) Q2 Earnings

Mattel, Inc. MAT is scheduled to report second-quarter 2020 results on Jul 23, after the closing bell. In the last reported quarter, the company’s earnings missed the Zacks Consensus Estimate by 33.33%.

Q2 Estimates

The Zacks Consensus Estimate for second-quarter is pegged at a loss of 37 cents, compared with a loss of 25 cents reported in the year-ago quarter. Over the past seven days, the estimates have remained stable. The consensus mark for revenues stands at $664.3 million, suggesting a decline of 22.8% from prior-year quarter.

Factors to Note

The company’s second-quarter results are likely to reflect dismal performance of the company’s Power Brands. Supply chain disruption owing to the pandemic has been a major cause of concern.

The Zacks Consensus Estimate for Power Brands revenues is pegged at $466 million, reflecting a decline of 20.2%. Moreover, revenues for Power Brands Barbie, Fisher-Price and Thomas & Friends Brand, and Hot Wheels are likely to witness decline of 15.5%, 29.3% and 2.8% year over year to $158 million, $157 million and $175 million, respectively. Moreover, softness in North America sales might to have persisted in the quarter to be reported.

High costs and stiff competition from an array of alternative modes of entertainment including video games, MP3 players, tablets, smartphones and other electronic devices are likely to have weighed on the second-quarter performance.

Mattel, Inc. Price and EPS Surprise

Mattel, Inc. Price and EPS Surprise

Mattel, Inc. price-eps-surprise | Mattel, Inc. Quote

What the Zacks Model Unveils

Our proven model predicts an earnings beat for Mattel this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat.

You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Mattel has an Earnings ESP of +3.74% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Other Stocks Poised to Beat Earnings Estimates

Here are some other stocks from the Zacks Consumer Discretionary space that investors may consider, as our model shows that these too have the right combination of elements to deliver an earnings beat this time around.

Electronic Arts Inc. EA has an Earnings ESP of +27.86% and a Zacks Rank #3, at present.

Eldorado Resorts, Inc. ERI has an Earnings ESP of +23.51% and a Zacks Rank of 3.

PlayAGS, Inc. AGS has an Earnings ESP of +4.36% and a Zacks Rank #2.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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