We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Mattel (MAT) Up 1.8% Since Last Earnings Report: Can It Continue?
Read MoreHide Full Article
It has been about a month since the last earnings report for Mattel (MAT - Free Report) . Shares have added about 1.8% in that time frame, underperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Mattel due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Mattel Q2 Earnings Top Estimates, Revenues Lag
Mattel reported mixed second-quarter 2024 results, with earnings surpassing the Zacks Consensus Estimate and revenues missing the same. The top line missed the consensus estimate for the third straight quarter.
The company experienced robust bottom-line performance, propelled mainly by significant gross margin expansion and growth in adjusted EBITDA. MAT is well positioned for the second half with new product innovation and increased retail support. The company is in a strong financial position to execute its strategy to expand its IP-driven toy business and expand entertainment offerings.
Earnings & Revenue Discussion
In the quarter under review, Mattel reported adjusted earnings per share of 19 cents, beating the Zacks Consensus Estimate of 16 cents. In the prior-year quarter, it reported adjusted earnings per share of 10 cents.
Net sales during the quarter amounted to $1079.7 million, missing the consensus estimate of $1091 million by 1%. The top line dropped 1% on a reported basis and remained flat at constant currency (cc) year over year.
Net sales in the North America segment declined 3% year over year on a reported basis and at cc. The International segment’s net sales increased 2% (as reported) and 3% (at cc) year over year, respectively.
In the North America segment, gross billings fell 3% (as reported and at cc) year over year. The downside was primarily due to lower sales in Infant, Toddler and Preschool (primarily Preschool Entertainment and Baby Gear & Power Wheels). This was partially offset by growth in Fisher-Price, Dolls (primarily Barbie) and Vehicles (primarily Matchbox and Hot Wheels) and growth in Action Figures, Building Sets, Games and Other (primarily Games).
Gross billings in the International segment declined 1% (on a reported basis) and remained flat (at cc) year over year. The downtick was primarily due to a decline in Dolls (mainly Barbie and Disney Princess and Frozen) and Action Figures, Building Sets, Games and Other (mainly Action Figures). This was partially offset by growth in Games, Vehicles (mainly Hot Wheels) and Infant, Toddler and Preschool (mainly Fisher-Price).
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 Other.
Worldwide gross billings by Mattel Power Brands declined 2% (on a reported basis) and (at cc) year over year to $1201.3 million. The Barbie brand witnessed a fall of 6% (on a reported basis) and 5% (at cc) year over year.
Gross billings at the Hot Wheels brand rose 4% (on a reported basis) and 5% (at cc) year over year. Gross billings at Fisher-Price were up 10% (on a reported basis) and 11% (at cc) year over year. Gross billings at Other declined 7% (on a reported basis) and 6% (at cc) year over year.
Operating Results
During the second quarter of 2024, Mattel’s adjusted gross margin was 49.2%, up 430 basis points year over year. The upside was caused by a decline in inventory management costs, cost deflation, savings from the Optimizing for Profitable Growth program and lower sales adjustments. Adjusted EBITDA increased $15% year-over-year to $170.8 million.
During the quarter under discussion, adjusted other selling and administrative expenses increased $37 million year over year to $361.2 million. The uptick was mainly caused by market-related pay increases and investments.
Balance Sheet
As of Jun 30, 2024, cash and cash equivalents were $722.4 million compared with $1,261.4 million as of 2023 end. Total inventories at the end of the second quarter were $776.9 million compared with $971.6 million in the year-ago quarter. Long-term debt (as of Jun 30, 2024) was $2.33 billion, on par with the reported value in 2023 end. Shareholders’ equity was $1.97 billion as of Jun 30, 2024.
2024 Outlook
For 2024, management continues to expect net sales to be comparable with the prior year at cc. Mattel continues to expect adjusted gross margin in the range of 48.5-49%. Adjusted EBITDA is projected in the range of $975-$1,025 million.
Capital expenditures are expected in the range of $175-$200 million compared with $160 million in 2023. Mattel anticipates 2024 adjusted earnings per share (EPS) to be between $1.35 and $1.45, compared with $1.23 in 2023.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended upward during the past month.
VGM Scores
Currently, Mattel has a nice Growth Score of B, though it is lagging a bit on the Momentum Score front with a C. Charting a somewhat similar path, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Mattel has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Mattel (MAT) Up 1.8% Since Last Earnings Report: Can It Continue?
It has been about a month since the last earnings report for Mattel (MAT - Free Report) . Shares have added about 1.8% in that time frame, underperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Mattel due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Mattel Q2 Earnings Top Estimates, Revenues Lag
Mattel reported mixed second-quarter 2024 results, with earnings surpassing the Zacks Consensus Estimate and revenues missing the same. The top line missed the consensus estimate for the third straight quarter.
The company experienced robust bottom-line performance, propelled mainly by significant gross margin expansion and growth in adjusted EBITDA. MAT is well positioned for the second half with new product innovation and increased retail support. The company is in a strong financial position to execute its strategy to expand its IP-driven toy business and expand entertainment offerings.
Earnings & Revenue Discussion
In the quarter under review, Mattel reported adjusted earnings per share of 19 cents, beating the Zacks Consensus Estimate of 16 cents. In the prior-year quarter, it reported adjusted earnings per share of 10 cents.
Net sales during the quarter amounted to $1079.7 million, missing the consensus estimate of $1091 million by 1%. The top line dropped 1% on a reported basis and remained flat at constant currency (cc) year over year.
Net sales in the North America segment declined 3% year over year on a reported basis and at cc. The International segment’s net sales increased 2% (as reported) and 3% (at cc) year over year, respectively.
In the North America segment, gross billings fell 3% (as reported and at cc) year over year. The downside was primarily due to lower sales in Infant, Toddler and Preschool (primarily Preschool Entertainment and Baby Gear & Power Wheels). This was partially offset by growth in Fisher-Price, Dolls (primarily Barbie) and Vehicles (primarily Matchbox and Hot Wheels) and growth in Action Figures, Building Sets, Games and Other (primarily Games).
Gross billings in the International segment declined 1% (on a reported basis) and remained flat (at cc) year over year. The downtick was primarily due to a decline in Dolls (mainly Barbie and Disney Princess and Frozen) and Action Figures, Building Sets, Games and Other (mainly Action Figures). This was partially offset by growth in Games, Vehicles (mainly Hot Wheels) and Infant, Toddler and Preschool (mainly Fisher-Price).
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 Other.
Worldwide gross billings by Mattel Power Brands declined 2% (on a reported basis) and (at cc) year over year to $1201.3 million. The Barbie brand witnessed a fall of 6% (on a reported basis) and 5% (at cc) year over year.
Gross billings at the Hot Wheels brand rose 4% (on a reported basis) and 5% (at cc) year over year. Gross billings at Fisher-Price were up 10% (on a reported basis) and 11% (at cc) year over year. Gross billings at Other declined 7% (on a reported basis) and 6% (at cc) year over year.
Operating Results
During the second quarter of 2024, Mattel’s adjusted gross margin was 49.2%, up 430 basis points year over year. The upside was caused by a decline in inventory management costs, cost deflation, savings from the Optimizing for Profitable Growth program and lower sales adjustments. Adjusted EBITDA increased $15% year-over-year to $170.8 million.
During the quarter under discussion, adjusted other selling and administrative expenses increased $37 million year over year to $361.2 million. The uptick was mainly caused by market-related pay increases and investments.
Balance Sheet
As of Jun 30, 2024, cash and cash equivalents were $722.4 million compared with $1,261.4 million as of 2023 end. Total inventories at the end of the second quarter were $776.9 million compared with $971.6 million in the year-ago quarter. Long-term debt (as of Jun 30, 2024) was $2.33 billion, on par with the reported value in 2023 end. Shareholders’ equity was $1.97 billion as of Jun 30, 2024.
2024 Outlook
For 2024, management continues to expect net sales to be comparable with the prior year at cc. Mattel continues to expect adjusted gross margin in the range of 48.5-49%. Adjusted EBITDA is projected in the range of $975-$1,025 million.
Capital expenditures are expected in the range of $175-$200 million compared with $160 million in 2023. Mattel anticipates 2024 adjusted earnings per share (EPS) to be between $1.35 and $1.45, compared with $1.23 in 2023.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended upward during the past month.
VGM Scores
Currently, Mattel has a nice Growth Score of B, though it is lagging a bit on the Momentum Score front with a C. Charting a somewhat similar path, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Mattel has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.