Barbie, Hot Wheels drive Mattel’s sales beat; shares soar

Barbie, Hot Wheels drive Mattel’s sales beat; shares soar

Mattel ended 2018 with its highest gross sales in five years, attributing their success to displaying greater diversity and adding educational value to their dolls.

Barbie dolls are seen inside the new flagship FAO Schwarz store in Rockefeller Plaza in New York, US, November 16, 2018. (Reuters pic)
BENGALURU:
Mattel beat Wall Street estimates for quarterly sales on Thursday, as the toy-maker sold more Barbie dolls and Hot Wheels cars during the crucial holiday season, sending its shares up more than 17% in extended trading.

Gross sales rose 12% for Barbie and 9% for Hot Wheels in the fourth quarter, handily beating analysts’ estimates for both brands.

However, gross sales in North America fell 10.1% to US$744.5 million, reflecting Mattel’s struggles with finding a major retailer to make up for lost sales from the shuttering of Toys ‘R’ Us.

Analysts had expected North American gross sales of US$829.6 million, according to four analysts polled by Refinitiv.

Overall, Mattel’s net revenue fell 5.4% to US$1.52 billion, but was still above analysts’ estimates of US$1.44 billion.

Mattel reported net income of US$14.9 million, or 4 cents per share, in the fourth quarter ended Dec 31, compared with a loss of US$281.3 million, or 82 cents per share, a year earlier, when it took a one-time charge related to changes in US tax laws.

Costs fell 27% to US$814.7 million as the company benefited from its plans to streamline its operations.

Mattel has been aiming to cut at least US$650 million in net costs by the end of 2019 through job cuts and other measures such as looking at options for its manufacturing facilities.

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