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The holiday shopping season produced the best year-end quarter for Mattel in more than a dozen years after toy sales rose double-digit, overtaking the industry, the CEO said on Wednesday. Ynon Kreiz at CNBC, Jim Cramer.
In its fourth-quarter report released after Tuesday’s close, Mattel reported revenue of $ 1.6 billion, up 10% from the quarter last year. This is the first time the toymaker’s sales have increased by double digits in a holiday quarter since 2006, when the figure rose more than 14%.
“This has been an exceptional quarter for Mattel with our best performance in years with strong consumer demand and another landmark year for the company,” Kreiz said in a “Mad Money” interview.
The performance, which followed double-digit growth in the third quarter, is a sign that the company’s multi-year turnaround plan is paying off under Kreiz’s leadership. He pointed out that the company is also improving its cash flow.
Mattel experienced its first year of growth since 2013, when revenues were just under $ 6.5 billion. For calendar year 2020, Mattel reported $ 4.58 billion in revenue, almost 2% more 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 expected by analysts.
Barbie had the best growth in Mattel’s product lines, with sales up 16% for the year.
“It’s not just about the quarter or the year,” said Kreiz, who took over as managing director in the first half of 2018. “It’s about the multi-year strategy that follows very well, which puts us in a position to continue to increase our profitability and accelerate our growth in 2021 and beyond. “
This multi-year strategy includes a list of objectives, including restoring profitability and resuming revenue growth in the short and medium term while capturing the full value of its intellectual properties in the medium and long term.
Building an online sales and e-commerce strategy, as well as producing films involving the Mattel brands are part of the company’s long-term vision.
The company launched a film and television division in 2018 and has over 50 projects underway, some of which are currently in production and many in development.
Projects include a live-action Uno movie, a Whac-A-Mole game show, and a Thomas & Friends series, Kreiz said.
“It’s part of our medium and long term strategy,” Kreiz said. “These projects take time given their scale and ambition, but we are well advanced in putting them in place and, you know, if successful, it can be transformative.”
Looking ahead, Mattel expects sales to grow by mid-to-single digits this year, barring the impact of the coronavirus 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 fell 2% on Wednesday to a close of $ 18.47. Since the start of the year, the stock is up nearly 6%.
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