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Mattel (MAT) Stock Up on Q4 Earnings Beat & Upbeat View
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Mattel, Inc. (MAT - Free Report) delivered impressive fourth-quarter 2021 results, with earnings and revenues surpassing the Zacks Consensus Estimate. The metrics beat the consensus mark for the seventh consecutive quarter. Moreover, the top and the bottom line increased on a year-over-year basis.
Following robust results, the company’s shares gained 11.2% in the after-hour trading session on Feb 9. Positive investor sentiments were witnessed as the company provided upbeat earnings and revenue guidance for 2022.
Ynon Kreiz, Mattel chairman and CEO, stated, “Mattel’s results for the quarter and full year came in well ahead of expectations, capping another exceptional performance for the company. We are in growth mode and believe we are well-positioned to continue our momentum, with 2022 guidance exceeding prior goals and an even stronger outlook for 2023.”
Earnings & Revenues Discussion
During the fourth quarter, the company reported adjusted earnings per share (EPS) of 53 cents, beating the Zacks Consensus Estimate of 33 cents by 60.6%. In the prior-year quarter, the company reported an adjusted EPS of 40 cents.
Net sales during the quarter amounted to $1,794.9 million, surpassing the Zacks Consensus Estimate of $1,663 million by 7.9%. The top line rose 10% year over year. On a constant-currency basis, sales increased 11% from the prior-year quarter’s levels.
In North America, gross billings rose 13% (as reported and at constant currency) year over year. This can primarily be attributed to an increase in sales in Dolls (including Barbie, Polly Pocket, and Spirit), Action Figures, Building Sets, Games and Other (including Masters of the Universe, Jurassic World and Plush), Vehicles (including CARS), and Infant, Toddler, and Preschool (including Power Wheels). Net sales in the North America segment rose 14% year over year on a reported and constant-currency (cc) basis.
In the International region, gross billings rose 7% (as reported) and 9% (at cc) year over year. The uptick was driven by growth in Action Figures, Building Sets, Games and Other (including Jurassic World, Masters of the Universe, Plush, Games and MEGA) and Dolls (including Barbie, Spirit, Enchantimals and Polly Pocket). However, this was partially offset by declines in Vehicles (including Hot Wheels and CARS) and Infant, Toddler and Preschool (including Fisher-Price and Thomas & Friends). Net Sales in the International segment increased 9% (on a reported basis) and 12% (at cc) year over year.
Brand-Wise Worldwide Sales
Mattel, through its subsidiaries, sells a broad range of toys. These items are grouped under different brands — Barbie, Hot Wheels, Fisher-Price and Thomas & Friends and Other.
As reported, worldwide gross billings by Mattel Power Brands climbed 9% year over year to $1,991.4 million. The metric advanced 9% year over year at cc. The Barbie brand witnessed an improvement of 18% (on a reported basis) and 19% (at cc) year over year. Gross billings at the Hot Wheels brand declined 6% (on a reported basis) and 5% (at cc) year over year. Gross billings at the Fisher-Price and Thomas & Friends brands were down 2% (on a reported and cc basis) year over year. Gross billings at Other increased 15% (on a reported basis) and 16% (at cc) year over year.
Operating Results
Adjusted gross margin contracted 220 basis points year over year to 49.3% on account of input cost inflation. However, the downtick was offset by benefits associated with pricing, favorable fixed cost absorption and savings from the Optimizing for Growth program.
During the quarter, adjusted other selling and administrative expenses increased 2% year over year to $355.2 million. The increase was primarily driven by increased investments in the business.
Balance Sheet
As of Dec 31, 2021, the company’s cash and equivalents were $731.4 million compared with $762.2 million as on Dec 31, 2020. Total inventories as of the end of the fourth quarter were up 47.1% year over year to $777.2 million.
The company’s long-term debt was $ 2,571 million as of Dec 31, 2021, lower than $2,854.7 million as of Dec 30, 2020. Shareholder’s equity was $1,568.8 million.
2021 Highlights
Net Sales in 2021 came in at $5,457.7 million compared with $4,588.4 million in 2020.
Adjusted operating income in 2021 came in at $763.3 million compared with $441.5 million in 2020.
In 2021, adjusted diluted EPS came in at $1.30 per share compared with 54 cents reported in the previous year.
Outlook
For 2022, the company anticipates net sales to grow in the range of 8-10% at cc. Adjusted Gross Margin for 2022 is expected at 47%. Adjusted EBITDA for 2022 is expected in the range of $1,100-$1,125 million, suggesting an increase from $1,007 reported in 2021. Capital expenditures for 2022 are expected to be $175-200 million. The company anticipates 2022 adjusted EPS in the range of $1.42-1.48. Its mid-point of $1.45 is above the current Zacks Consensus Estimate of $1.43.
For 2023, the company anticipates net sales to grow in High-Single Digit on a constant currency basis. Adjusted Operating Income Margin for 2023 is expected between 16-17% of net sales. For 2023, the company expects adjusted EPS to be greater than $1.90.
Crocs flaunts a Zacks Rank #1. The company has a trailing four-quarter earnings surprise of 41.6%, on average. Shares of Crocs have increased 36.4% in the past year.
The Zacks Consensus Estimate for CROX’s 2022 sales and EPS indicates a rise of 48.5% and 23.2%, respectively, from the year-ago period’s levels.
RCI Hospitality flaunts a Zacks Rank #1. The company has a trailing four-quarter earnings surprise of 63.2%, on average. Shares of RCI Hospitality have surged 44.4% in the past year.
The Zacks Consensus Estimate for RICK’s 2022 sales and EPS suggests growth of 33.7% and 18.9%, respectively, from the year-ago period’s levels.
JAKKS Pacific flaunts a Zacks Rank #1. The company has a trailing four-quarter earnings surprise of 48.9%, on average. Shares of JAKKS Pacific have increased 43.2% in the past year.
The Zacks Consensus Estimate for JAKK’s 2022 sales and EPS suggests growth of 4.9% and 227.8%, respectively, from the year-ago period’s levels.
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Mattel (MAT) Stock Up on Q4 Earnings Beat & Upbeat View
Mattel, Inc. (MAT - Free Report) delivered impressive fourth-quarter 2021 results, with earnings and revenues surpassing the Zacks Consensus Estimate. The metrics beat the consensus mark for the seventh consecutive quarter. Moreover, the top and the bottom line increased on a year-over-year basis.
Following robust results, the company’s shares gained 11.2% in the after-hour trading session on Feb 9. Positive investor sentiments were witnessed as the company provided upbeat earnings and revenue guidance for 2022.
Ynon Kreiz, Mattel chairman and CEO, stated, “Mattel’s results for the quarter and full year came in well ahead of expectations, capping another exceptional performance for the company. We are in growth mode and believe we are well-positioned to continue our momentum, with 2022 guidance exceeding prior goals and an even stronger outlook for 2023.”
Earnings & Revenues Discussion
During the fourth quarter, the company reported adjusted earnings per share (EPS) of 53 cents, beating the Zacks Consensus Estimate of 33 cents by 60.6%. In the prior-year quarter, the company reported an adjusted EPS of 40 cents.
Mattel, Inc. Price, Consensus and EPS Surprise
Mattel, Inc. price-consensus-eps-surprise-chart | Mattel, Inc. Quote
Net sales during the quarter amounted to $1,794.9 million, surpassing the Zacks Consensus Estimate of $1,663 million by 7.9%. The top line rose 10% year over year. On a constant-currency basis, sales increased 11% from the prior-year quarter’s levels.
In North America, gross billings rose 13% (as reported and at constant currency) year over year. This can primarily be attributed to an increase in sales in Dolls (including Barbie, Polly Pocket, and Spirit), Action Figures, Building Sets, Games and Other (including Masters of the Universe, Jurassic World and Plush), Vehicles (including CARS), and Infant, Toddler, and Preschool (including Power Wheels). Net sales in the North America segment rose 14% year over year on a reported and constant-currency (cc) basis.
In the International region, gross billings rose 7% (as reported) and 9% (at cc) year over year. The uptick was driven by growth in Action Figures, Building Sets, Games and Other (including Jurassic World, Masters of the Universe, Plush, Games and MEGA) and Dolls (including Barbie, Spirit, Enchantimals and Polly Pocket). However, this was partially offset by declines in Vehicles (including Hot Wheels and CARS) and Infant, Toddler and Preschool (including Fisher-Price and Thomas & Friends). Net Sales in the International segment increased 9% (on a reported basis) and 12% (at cc) year over year.
Brand-Wise Worldwide Sales
Mattel, through its subsidiaries, sells a broad range of toys. These items are grouped under different brands — Barbie, Hot Wheels, Fisher-Price and Thomas & Friends and Other.
As reported, worldwide gross billings by Mattel Power Brands climbed 9% year over year to $1,991.4 million. The metric advanced 9% year over year at cc. The Barbie brand witnessed an improvement of 18% (on a reported basis) and 19% (at cc) year over year. Gross billings at the Hot Wheels brand declined 6% (on a reported basis) and 5% (at cc) year over year. Gross billings at the Fisher-Price and Thomas & Friends brands were down 2% (on a reported and cc basis) year over year. Gross billings at Other increased 15% (on a reported basis) and 16% (at cc) year over year.
Operating Results
Adjusted gross margin contracted 220 basis points year over year to 49.3% on account of input cost inflation. However, the downtick was offset by benefits associated with pricing, favorable fixed cost absorption and savings from the Optimizing for Growth program.
During the quarter, adjusted other selling and administrative expenses increased 2% year over year to $355.2 million. The increase was primarily driven by increased investments in the business.
Balance Sheet
As of Dec 31, 2021, the company’s cash and equivalents were $731.4 million compared with $762.2 million as on Dec 31, 2020. Total inventories as of the end of the fourth quarter were up 47.1% year over year to $777.2 million.
The company’s long-term debt was $ 2,571 million as of Dec 31, 2021, lower than $2,854.7 million as of Dec 30, 2020. Shareholder’s equity was $1,568.8 million.
2021 Highlights
Net Sales in 2021 came in at $5,457.7 million compared with $4,588.4 million in 2020.
Adjusted operating income in 2021 came in at $763.3 million compared with $441.5 million in 2020.
In 2021, adjusted diluted EPS came in at $1.30 per share compared with 54 cents reported in the previous year.
Outlook
For 2022, the company anticipates net sales to grow in the range of 8-10% at cc. Adjusted Gross Margin for 2022 is expected at 47%. Adjusted EBITDA for 2022 is expected in the range of $1,100-$1,125 million, suggesting an increase from $1,007 reported in 2021. Capital expenditures for 2022 are expected to be $175-200 million. The company anticipates 2022 adjusted EPS in the range of $1.42-1.48. Its mid-point of $1.45 is above the current Zacks Consensus Estimate of $1.43.
For 2023, the company anticipates net sales to grow in High-Single Digit on a constant currency basis. Adjusted Operating Income Margin for 2023 is expected between 16-17% of net sales. For 2023, the company expects adjusted EPS to be greater than $1.90.
Zacks Rank & Key Picks
Mattel currently has a Zacks Rank #4 (Sell).
Some better-ranked stocks from the Zacks Consumer Discretionary sector are Crocs, Inc. (CROX - Free Report) , RCI Hospitality Holdings, Inc. (RICK - Free Report) and JAKKS Pacific, Inc. (JAKK - Free Report) . You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Crocs flaunts a Zacks Rank #1. The company has a trailing four-quarter earnings surprise of 41.6%, on average. Shares of Crocs have increased 36.4% in the past year.
The Zacks Consensus Estimate for CROX’s 2022 sales and EPS indicates a rise of 48.5% and 23.2%, respectively, from the year-ago period’s levels.
RCI Hospitality flaunts a Zacks Rank #1. The company has a trailing four-quarter earnings surprise of 63.2%, on average. Shares of RCI Hospitality have surged 44.4% in the past year.
The Zacks Consensus Estimate for RICK’s 2022 sales and EPS suggests growth of 33.7% and 18.9%, respectively, from the year-ago period’s levels.
JAKKS Pacific flaunts a Zacks Rank #1. The company has a trailing four-quarter earnings surprise of 48.9%, on average. Shares of JAKKS Pacific have increased 43.2% in the past year.
The Zacks Consensus Estimate for JAKK’s 2022 sales and EPS suggests growth of 4.9% and 227.8%, respectively, from the year-ago period’s levels.