Mattel share price rises after quarterly report

Mattel reported worse-than-expected results and sales for the fourth quarter, but gave a positive earnings outlook for the 2024 financial year. 

The toy manufacturer posted earnings per share (EPS) of 0.29 dollars in the fourth quarter, falling well short of the consensus forecast of 0.33 dollars. At 1.62 billion dollars, turnover also fell short of the estimate of 1.66 billion dollars.

Gross sales in the 4th quarter

Gross sales in the 4th quarter amounted to 1.84 billion dollars, of which 763.1 million dollars were attributable to the toy category "dolls". This corresponds to an increase of 29 percent compared to the previous year and exceeds the forecast of 730.8 million dollars. The adjusted gross margin improved significantly from 43.1 percent in the previous year to 48.8 percent, only just missing the estimate of 49 percent.

Adjusted EBITDA amounted to 234 million dollars, which corresponds to robust growth of 48% compared to the previous year, but is below the expected 246.4 million dollars.

Adjusted earnings per share of between 1.35 and 1.45 dollars are expected for the new financial year, which is roughly in line with the forecast of 1.37 dollars.

Expeting an adjusted gross margin

Mattel's management expects an adjusted gross margin of between 48.5 percent and 49 percent, which is slightly above the estimated 47.9 percent. Adjusted EBITDA is estimated to be between 975 million dollars and 1.03 billion dollars, compared to the consensus forecast of 987.3 million dollars.

In addition, the company announced a $1 billion share buyback program, following $203 million in buybacks in 2023.

Profit forecast for 2024 and 2025

Mattel issued a profit forecast for the years 2024 and 2025. For 2024, the company expects net sales at constant currency to be in line with the prior year, with growth in vehicles offset by a decline in dolls as the company capitalizes on the benefits of the Barbie movie. 

The company expects net sales and earnings growth in 2025 to benefit from improving industry trends, toy innovation, expanding entertainment offerings and licensing partnerships, and savings from the Optimizing for Profitable Growth program.

Sources: www.de.investing.com and www.ch.marketscreener.com