The holiday shopping season produced the best end-of-the-year quarter for Mattel in more than a dozen years after toy sales increased by double digits, outpacing the industry, CEO Ynon Kreiz told CNBC’s Jim Cramer Wednesday.
In its fourth-quarter report released after Tuesday’s close, Mattel posted $1.6 billion in sales, up 10% from the year-ago quarter. It marks the first time the toymaker’s sales grew double digits in a holiday quarter since 2006 when the figure rose more than 14%.
“This was an exceptional quarter for Mattel with our best performance in years with strong consumer demand and another milestone year for the company,” Kreiz said in a “Mad Money” interview.
The performance, which followed double-digit growth in the third quarter, is one sign that the company’s multi-year recovery plan is yielding results under Kreiz’s leadership. He highlighted that the company is also improving cash flows.
Mattel had its first growth year since 2013 when revenues were just shy of $6.5 billion. For calendar year 2020, Mattel reported $4.58 billion in revenue, nearly 2% higher than in 2019, and $127 million in net income, the first profitable year for the company since 2016, according to FactSet. The results were better than what analysts forecast.
Barbie had the best growth of Mattel’s product lines, with sales surging 16% on the year.
“This is not just about the quarter or the year,” said Kreiz, who became chief executive in the first half of 2018. “It’s about the multi-year strategy that is tracking very well, which puts us in a strong position to continue to increase profitability and accelerate our growth in 2021 and beyond.”
That multi-year strategy includes a list of goals, including restoring profitability and regaining topline growth in the short-to-mid term while capturing the full value of its intellectual properties in the mid-to-long term.
Building an online retail and e-commerce strategy, along with producing films involving Mattel brands are part of the company’s long-term vision.
The company launched a film and television divisions in 2018 and has more than 50 projects in the works, with some currently in production and many in the development stage.
Among the projects are an Uno live-action film, a Whac-A-Mole game show and a Thomas & Friends series, Kreiz said.
“This is part of our mid- to long-term strategy,” Kreiz said. “These projects take time given the scale and their ambition, but we are well under way in putting them in place and, you know, in success this can be transformative.”
Looking forward, Mattel projects sales to grow by mid-to-single digits this year, barring coronavirus impact and other economic uncertainties. The company plans to spend between $125 million and $150 million on investments and other priorities.
Despite the strong quarterly report, Mattel shares dropped 2% Wednesday to an $18.47 close. Year to date, the stock is up nearly 6%.
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Source: Business - cnbc.com
