Mattel Inc.
MAT 10.76%
reported gross sales grew 19% to greater than $1 billion within the newest interval on robust demand for toys and enhancements in its provide chain.
Chief Executive
Ynon Kreiz
mentioned in an interview Wednesday that Mattel stays targeted on decreasing debt and potential deal making.
Mr. Kreiz mentioned in February that Mattel had accomplished the corporate’s turnaround, slashing prices and the workforce in addition to closing factories and rebuilding relationships with Hollywood studios. Finance chief
Anthony DiSilvestro
then mentioned that with a stronger steadiness sheet, Mattel was prepared to have a look at offers and different company improvement alternatives.
On Wednesday, Mr. Kreiz mentioned that the corporate’s capital allocation priorities and standards remained the identical. Through the pandemic Mattel has taken steps to enhance its provide chain and pare its manufacturing footprint to chop prices.
“It’s not that we were not impacted, but we were able to work through disruptions in the market,” mentioned Mr. Kreiz, including that each one factories have been absolutely operational and Mattel was working with retail companions to make sure cabinets are absolutely stocked.
Mattel swung to a first-quarter revenue of $21.5 million, or 6 cents a share. On an adjusted foundation, revenue was 8 cents a share. Net gross sales rose 19% to $1.04 billion. The outcomes beat the FactSet analyst consensus.
Shares, which closed Wednesday up almost 11%, gained a further 3.3% after hours.
The toy maker additionally maintained its monetary targets for 2022 and 2023. It beforehand indicated a gross sales enhance of 8% to 10% this yr, when stripping out foreign money fluctuations, and gross sales rising by a high-single-digit proportion the next yr. Sales climbed by 19% in 2021.
The steering displays increased costs, which the corporate mentioned will assist it offset the influence of value inflation. The firm expects value inflation to average in 2023.
As for enterprise disruption tied to Russia’s invasion of Ukraine, firm officers mentioned they anticipate misplaced enterprise in each international locations to be offset by gross sales progress elsewhere. Russia and Ukraine accounted for lower than 3% of whole gross billings in 2021, the corporate mentioned.
Mattel received again the licensing rights to
Walt Disney Co.
’s princess lineup and to Disney’s blockbuster “Frozen.” It is slated to renew promoting new Disney toys in 2023.
The firm misplaced the license to
Hasbro Inc.
in 2016, a monetary and symbolic setback that precipitated a interval of 4 CEOs and compounding challenges as Mattel tried to fill the outlet from the misplaced enterprise.
Hasbro, which in 2017 made an unsuccessful takeover supply for Mattel, is beneath stress from investor Alta Fox Capital Management LLC, which is making an attempt to overtake its board and is pushing the corporate to spin off a unit that homes Dungeons & Dragons.
Dolls, together with Mattel’s flagship Barbie model, have been key to progress within the firm’s prime line. In the newest quarter, Mattel recorded a 4% enhance in dolls gross billings, or the quantity invoiced to clients, as Barbie and Polly Pocket offset a decline in American Girl.
Mr. Kreiz attributed the decline principally to the shift of Easter gross sales to the second quarter of this yr and mentioned that Mattel nonetheless expects American Girl’s gross sales to develop this yr, pointing to deliberate product launches and advertising campaigns which might be geared towards the second half of 2022.
—Paul Ziobro
| contributed to this text.
Corrections & Amplifications
Mattel recorded a 4% enhance in dolls gross billings. An earlier model of this text incorrectly mentioned the corporate recorded a 4% enhance in gross billings. (Corrected on April 27)
Write to Maria Armental at [email protected]
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