Mattel (MAT) Q1 Earnings & Sales Beat Estimates, Stock Up

Mattel, Inc. MAT reported first-quarter 2021 results, wherein earnings and revenues surpassed the Zacks Consensus Estimate. Notably, the metrics beat the consensus mark for the fourth consecutive quarter. Following the robust results, the company’s shares gained 7.3% in after-hour trading session on Apr 22.

Despite the coronavirus pandemic, the top and the bottom-line improved year over year on robust e-commerce growth, highly efficient supply chain and strong demand for its products. Moreover, increase in worldwide gross sales for Dolls, Infant, Toddler and Preschool, Vehicle, Action Figures, Building Sets, Games, and Other drove the quarterly results. Also, sales of Barbie, Hot Wheels and Fisher-Price and Thomas & Friends increased significantly during the reported quarter.

The company reported adjusted loss per share of 10 cents that was narrower than the Zacks Consensus Estimate of a loss of 34 cents per share. In the prior-year quarter, the company had reported adjusted loss per share of 56 cents per share.

Ynon Kreiz, Mattel chairman and CEO said, “This was another record quarter for the company, with truly exceptional results reflecting the success of the turnaround, as we continue to drive transformational improvements and acceleration in our business. Following the third consecutive quarter of growing market share, we are strengthening our position as a consistent leader in the toy industry.”

Sales Discussion

Net sales of $874 million surpassed the Zacks Consensus Estimate of $686.4 million. Moreover, the top line improved 47.1% year over year. On a constant-currency basis, sales increased 46% from the prior-year quarter.

In North America, gross billings rose 67%, both on a reported and constant-currency basis. This can primarily be attributed to increase in sales in Dolls (including Barbie and Spirit), Infant, Toddler, and Preschool (including Fisher-Price and Thomas & Friends), Vehicles (including Hot Wheels). and Action Figures, Building Sets, Games, and Other (including Masters of the Universe, JurassicWorld, Plush, WWE, and MEGA).

In the International region, gross billings rose 29% as reported and 26% at constant currency, owing to growth in Dolls (including Barbie), Infant, Toddler, and Preschool (including Fisher-Price and Thomas & Friends), Vehicles (including Hot Wheels), and Action Figures, Building Sets, Games, and Other (including Jurassic World, Masters of the Universe, Games, Plush, and MEGA).

Mattel, Inc. Price, Consensus and EPS Surprise

 

Mattel, Inc. Price, Consensus and EPS Surprise

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

Brand-Wise Worldwide Sales

Mattel, through its subsidiaries, sells a broad range of toys. These items are grouped under different brands — Barbie, Hot Wheels, Fisher-Price and Thomas & Friends and Other.

As reported, worldwide gross sales at Mattel Power Brands rose 46% to $979.0 million year over year. The metric also rose 45% on a constant-currency basis. Moreover, the Barbie brand witnessed an improvement of 87% on a reported basis and 86% on a constant-currency basis. Gross sales at the Hot Wheels brand climbed 16%, both on a reported and constant-currency basis. Furthermore, gross sales were up 33% on a reported basis and 32% on a constant-currency basis at the Fisher-Price and Thomas & Friends brands. Gross sales at Other increased 47% on a reported basis and 46% on a constant-currency basis. 

Operating Results

Adjusted gross margin expanded 380 basis points to 46.8%, driven fixed cost absorption benefit associated with high sales growth in the quarter and savings from the Optimizing for Growth program, partially offset by input cost inflation in cost of goods sold.

Adjusted other selling and administrative expenses declined 2% to $309 million. The improvement was primarily driven by the cost-saving actions taken in 2020 and the Optimizing for Growth program, partially offset by higher compensation expenses.

Balance Sheet

As of Mar 31, 2021, the company’s cash and equivalents were $615.2 million compared with $762.2 million as of Dec 31, 2020, and $499.4 as on Mar 31, 2020. Total inventories as of the end of the first quarter were up 8.8% year over year to $609.8 million.

The company’s long-term debt was $2,837.7 million as of Mar 31, 2020, lower than $2,848.9 million as of Mar 31, 2020. Shareholder’s equity was $ 473.9 million.

Zacks Rank

Mattel, which shares space with Hasbro HAS, JAKKS Pacific, Inc. JAKK and Electronic Arts Inc. EA, currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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Mattel, Inc. (MAT): Free Stock Analysis Report
 
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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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