Mattel beats analysts’ estimate for earnings in the fourth quarter but misses on the revenue front

Mattel announced its quarterly performance results on Thursday that suggested a mixed outlook for the recent quarter. Revenue in the holiday season quarter, however, was weighed by a sharp decline in Fisher-Price and American Girl brands’ sales.

Following the release of the quarterly earnings report, the stock was first reported losing traction. In after-hours trading, however, it settled around 5% higher for the day.

Mattel Records A 3% Decline In Sales In 2019’s Fourth Quarter

The overall decline in sales in the holiday season quarter was recorded at 3%, much of which was attributed to the poor sales of Fisher-Price toys and American Girl dolls. In the individual divisions, the American Girl segment saw a 20% decline in sales in the fourth quarter that resulted in a 6% drop in the doll category at large despite upbeat sales of the Barbie brand.

The preschool, toddler, and infant segment that is known for Fisher-Price, Fisher-Price Friends, and Thomas & Friends, noted a 9% decline in sales in the recent quarter. The experts, however, highlighted that Mattel wasn’t the only one to have struggled in the holidays as others including Target, Funko, and Spin Master also printed disappointing sales figures for the holiday season. Hasbro, on the other hand, benefitted from its partnership with Disney and saw massive sales of Start Wars and Frozen toys that drove its sales 3% up in the holiday quarter.

The divisional weakness in terms of sales, however, was unable to hit the company on the earnings front that were posted better than expected in the fourth quarter. The initial target of $650 million for cost-cutting was also exceeded in the recent quarter by 35% ($225 million).

Mattel’s Figures Versus Analysts’ Estimates

The American multinational toy company also announced a slight profit in 2019’s Q4. According to Refinitiv, analysts had expected the company to make 1 cent of earnings per share in the recent quarter. In its earnings report on Thursday, however, the company posted a significantly higher 11 cents of earnings per share (excluding one-time items). On the revenue front, the company recorded $1.47 billion in the fourth quarter that missed the experts’ forecast of $1.50 billion.

Mattel closed the week at around $14 per share in the stock market on Friday that marks an around 5% growth in 2020 so far. Its performance in 2019 was significantly better as the company registered over 30% of annual growth in the stock market.