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Mattel (MAT) Inks Deal With Illumination & Universal Brand
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Mattel, Inc. (MAT - Free Report) entered a three-year international licensing agreement with Illumination and Universal Brand Development for the Despicable Me franchise. The company’s licensing rights in North America and international markets comprise action figures and dolls, play-sets, vehicles, radio control toys, games, plush, role-play and accessories.
Mattel is also slated to launch a multi-category collection by Illumination's upcoming Minions sequel. The collection will be launched by retailers worldwide during the global theatrical premiere in summer of 2020.
The above move is in line with Mattel’s efforts to revive brand image and drive persistently falling revenues. To this end, the company also recently partnered with AT&T Inc.’s (T - Free Report) Warner Bros. These partnerships are likely to drive Mattel’s sales over the long term.
Shares of Mattel have gained 11.2% over the past six months against the industry’s collective decline of 25.4%. The share price appreciation can be attributed to the company’s robust point of sale momentum. Further, partnerships and expansion in international markets bode well for Mattel.
Why Partnerships are the Need of the Hour
All of Mattel’s recent strategies hint at the company’s unremitting aim of reviving sales and form the business in a way that would ensure a new organization design, capable of bringing positive transformations and building capacities.
While we appreciate Mattel’s efforts to chalk out counter strategies and adapt to changing demand, we remain apprehensive about the fact that the company has not been able to revive sales yet.
Mattel, like Hasbro (HAS - Free Report) and JAKKS Pacific (JAKK - Free Report) , is expected to keep shouldering the Toys ‘R’ Us liquidation effect in the near term. In fact, owing to the liquidation, Mattel’s net revenues in 2018 declined 7% year over year on a constant-currency basis. It also led to a sales slump across most brands under Mattel.
Our Take
We believe that the above strategy will help Mattel engage on a deeper level with consumers, thereby, driving sales. The company, as it is, relies heavily on a strong product line-up, which includes core brands, licensed brands and lucrative product associations. Owing to its popularity among young boys and girls, the company’s premier brands like Hot Wheels have been the category leader in multiple product segments for several years.
Mattel also forayed into other consumer product categories such as apparel, fashion and accessories to build brands. In fact, in 2018, worldwide gross sales for Hot Wheels were up 9% and reached highest annual sales in its 50-year history. Global POS were also up by a high-single digit for the year.
In addition to the stocks discussed above, wouldn't you like to know about our 10 finest buy-and-holds for the year?
From more than 4,000 companies covered by the Zacks Rank, these 10 were picked by a process that consistently beats the market. Even during 2018 while the market dropped -5.2%, our Top 10s were up well into double-digits. And during bullish 2012 – 2017, they soared far above the market's +126.3%, reaching +181.9%.
This year, the portfolio features a player that thrives on volatility, an AI comer, and a dynamic tech company that helps doctors deliver better patient outcomes at lower costs.
Image: Bigstock
Mattel (MAT) Inks Deal With Illumination & Universal Brand
Mattel, Inc. (MAT - Free Report) entered a three-year international licensing agreement with Illumination and Universal Brand Development for the Despicable Me franchise. The company’s licensing rights in North America and international markets comprise action figures and dolls, play-sets, vehicles, radio control toys, games, plush, role-play and accessories.
Mattel is also slated to launch a multi-category collection by Illumination's upcoming Minions sequel. The collection will be launched by retailers worldwide during the global theatrical premiere in summer of 2020.
The above move is in line with Mattel’s efforts to revive brand image and drive persistently falling revenues. To this end, the company also recently partnered with AT&T Inc.’s (T - Free Report) Warner Bros. These partnerships are likely to drive Mattel’s sales over the long term.
Shares of Mattel have gained 11.2% over the past six months against the industry’s collective decline of 25.4%. The share price appreciation can be attributed to the company’s robust point of sale momentum. Further, partnerships and expansion in international markets bode well for Mattel.
Why Partnerships are the Need of the Hour
All of Mattel’s recent strategies hint at the company’s unremitting aim of reviving sales and form the business in a way that would ensure a new organization design, capable of bringing positive transformations and building capacities.
While we appreciate Mattel’s efforts to chalk out counter strategies and adapt to changing demand, we remain apprehensive about the fact that the company has not been able to revive sales yet.
Mattel, like Hasbro (HAS - Free Report) and JAKKS Pacific (JAKK - Free Report) , is expected to keep shouldering the Toys ‘R’ Us liquidation effect in the near term. In fact, owing to the liquidation, Mattel’s net revenues in 2018 declined 7% year over year on a constant-currency basis. It also led to a sales slump across most brands under Mattel.
Our Take
We believe that the above strategy will help Mattel engage on a deeper level with consumers, thereby, driving sales. The company, as it is, relies heavily on a strong product line-up, which includes core brands, licensed brands and lucrative product associations. Owing to its popularity among young boys and girls, the company’s premier brands like Hot Wheels have been the category leader in multiple product segments for several years.
Mattel also forayed into other consumer product categories such as apparel, fashion and accessories to build brands. In fact, in 2018, worldwide gross sales for Hot Wheels were up 9% and reached highest annual sales in its 50-year history. Global POS were also up by a high-single digit for the year.
Mattel currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Zacks' Top 10 Stocks for 2019
In addition to the stocks discussed above, wouldn't you like to know about our 10 finest buy-and-holds for the year?
From more than 4,000 companies covered by the Zacks Rank, these 10 were picked by a process that consistently beats the market. Even during 2018 while the market dropped -5.2%, our Top 10s were up well into double-digits. And during bullish 2012 – 2017, they soared far above the market's +126.3%, reaching +181.9%.
This year, the portfolio features a player that thrives on volatility, an AI comer, and a dynamic tech company that helps doctors deliver better patient outcomes at lower costs.
See Stocks Today >>