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Mattel (MAT) Q1 Earnings & Revenues Top Estimates, Stock Up
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Mattel, Inc. (MAT - Free Report) delivered impressive first-quarter 2022 results, wherein earnings and revenues surpassed the Zacks Consensus Estimate. The metrics not only beat the consensus mark for the eighth consecutive quarter but also improved on a year-over-year basis.
Following the robust results, the company’s shares gained 3.3% in the after-hour trading session on Apr 27.
The company’s shares appreciated 10.8% during the trading session on Apr 26 after the news surfaced that Mattel is in preliminary talks with private equity firms, Apollo Global Management and L Catterton, regarding a potential buyout.
After the robust results, Ynon Kreiz, Mattel chairman and CEO, stated, “Mattel’s supply chain is playing a key role in our success. All of our factories are fully operational, and we are working with our retail partners to ensure product is available on shelves to meet consumer demand. The full-year outlook is strong, we expect to grow market share, and we are reiterating our 2022 guidance and 2023 goals.”
Earnings & Revenues Discussion
During the first quarter, the company reported adjusted earnings per share (EPS) of 8 cents, against the Zacks Consensus Estimate of loss of 5 cents. In the prior-year quarter, the company reported an adjusted loss of 10 cents.
Net sales during the quarter amounted to $1,041.3 million, surpassing the Zacks Consensus Estimate of $932 million. The top line rose 19% year over year. On a constant-currency basis, sales improved 22% from the prior-year quarter’s levels.
In North America, gross billings surged 25% (as reported and at constant currency) year over year. This can primarily be attributed to an increase in sales in Action Figures, Building Sets, Games, and Other (including Jurassic World, Lightyear, and MEGA), Vehicles (including Hot Wheels), Infant, Toddler, and Preschool (including Fisher-Price and Thomas & Friends), and Dolls (including Barbie and Polly Pocket). Net sales in the North America segment rose 26% year over year on a reported and constant-currency (cc) basis.
In the International region, gross billings rose 16% (as reported) and 24% (at cc) year over year. The uptick was driven by growth in Vehicles (including Hot Wheels), Dolls (including Barbie and Polly Pocket), and Action Figures, Building Sets, Games, and Other (including Jurassic World, MEGA, and Lightyear). Net Sales in the International segment increased 16% (on a reported basis) and 24% (at cc) year over year.
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 19% year over year to $1,164.4 million. The metric advanced 23% year over year at cc. The Barbie brand witnessed an improvement of 8% (on a reported basis) and 12% (at cc) year over year. Gross billings at the Hot Wheels brand rose 31% (on a reported basis) and 36% (at cc) year over year. Gross billings at the Fisher-Price and Thomas & Friends brands were up 10% (on a reported basis) and 13% (at cc) year over year. Gross billings at Other increased 26% (on a reported basis) and 29% (at cc) year over year.
Operating Results
Adjusted gross margin contracted 70 basis points year over year to 46.6% due to input cost inflation. However, the decline was offset by benefits associated with pricing, favorable fixed cost absorption and savings from the Optimizing for Growth program.
During the quarter under discussion, adjusted other selling and administrative expenses increased by $13 million year over year to $322 million. The increase can primarily be attributed to increased higher employee-related expenses.
Balance Sheet
As of Mar 31, 2022, the company’s cash and equivalents were $536.6 million compared with $615.2 million as on Dec 31, 2021. Total inventories as of the end of the first quarter were up 54.7% year over year to $969.2 million.
The company’s long-term debt was $2,322.1 million as of Mar 31, 2022, lower than $2,837.7 million as of Dec 30, 2021. Shareholder’s equity was $1,618.1 million.
Outlook
For 2022, the company continues to anticipate 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 continues to anticipate 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% and 17% of net sales. For 2023, the company continues to expect adjusted EPS to be greater than $1.90.
Funko sports a Zacks Rank #1 (Strong Buy) at present. FNKO has a trailing four-quarter earnings surprise of 96.2%, on average. Shares of the company have declined 24.9% in the past year. You can see the complete list of today's Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Funko’s current financial year sales and EPS suggests growth of 22.6% and 26.8%, respectively, from the year-ago period’s reported levels.
Bluegreen Vacations sports a Zacks Rank #1 at present. BVH has a trailing four-quarter earnings surprise of 425.1%, on average. The stock has surged 35.2% in the past year.
The Zacks Consensus Estimate for BVH’s current financial year sales and EPS indicates growth of 8.3% and 20.8%, respectively, from the year-ago period’s reported levels.
Clarus carries a Zacks Rank #2 (Buy). The company has a trailing four-quarter earnings surprise of 12.3%, on average. Shares of the company have increased 5.2% in the past year.
The Zacks Consensus Estimate for CLAR’s 2022 sales and EPS suggests growth of 25.3% and 23.1%, respectively, from the year-ago period’s levels.
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Mattel (MAT) Q1 Earnings & Revenues Top Estimates, Stock Up
Mattel, Inc. (MAT - Free Report) delivered impressive first-quarter 2022 results, wherein earnings and revenues surpassed the Zacks Consensus Estimate. The metrics not only beat the consensus mark for the eighth consecutive quarter but also improved on a year-over-year basis.
Following the robust results, the company’s shares gained 3.3% in the after-hour trading session on Apr 27.
The company’s shares appreciated 10.8% during the trading session on Apr 26 after the news surfaced that Mattel is in preliminary talks with private equity firms, Apollo Global Management and L Catterton, regarding a potential buyout.
After the robust results, Ynon Kreiz, Mattel chairman and CEO, stated, “Mattel’s supply chain is playing a key role in our success. All of our factories are fully operational, and we are working with our retail partners to ensure product is available on shelves to meet consumer demand. The full-year outlook is strong, we expect to grow market share, and we are reiterating our 2022 guidance and 2023 goals.”
Earnings & Revenues Discussion
During the first quarter, the company reported adjusted earnings per share (EPS) of 8 cents, against the Zacks Consensus Estimate of loss of 5 cents. In the prior-year quarter, the company reported an adjusted loss of 10 cents.
Net sales during the quarter amounted to $1,041.3 million, surpassing the Zacks Consensus Estimate of $932 million. The top line rose 19% year over year. On a constant-currency basis, sales improved 22% from the prior-year quarter’s levels.
In North America, gross billings surged 25% (as reported and at constant currency) year over year. This can primarily be attributed to an increase in sales in Action Figures, Building Sets, Games, and Other (including Jurassic World, Lightyear, and MEGA), Vehicles (including Hot Wheels), Infant, Toddler, and Preschool (including Fisher-Price and Thomas & Friends), and Dolls (including Barbie and Polly Pocket). Net sales in the North America segment rose 26% year over year on a reported and constant-currency (cc) basis.
In the International region, gross billings rose 16% (as reported) and 24% (at cc) year over year. The uptick was driven by growth in Vehicles (including Hot Wheels), Dolls (including Barbie and Polly Pocket), and Action Figures, Building Sets, Games, and Other (including Jurassic World, MEGA, and Lightyear). Net Sales in the International segment increased 16% (on a reported basis) and 24% (at cc) year over year.
Mattel, Inc. Price, Consensus and EPS Surprise
Mattel, Inc. price-consensus-eps-surprise-chart | Mattel, Inc. Quote
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 19% year over year to $1,164.4 million. The metric advanced 23% year over year at cc. The Barbie brand witnessed an improvement of 8% (on a reported basis) and 12% (at cc) year over year. Gross billings at the Hot Wheels brand rose 31% (on a reported basis) and 36% (at cc) year over year. Gross billings at the Fisher-Price and Thomas & Friends brands were up 10% (on a reported basis) and 13% (at cc) year over year. Gross billings at Other increased 26% (on a reported basis) and 29% (at cc) year over year.
Operating Results
Adjusted gross margin contracted 70 basis points year over year to 46.6% due to input cost inflation. However, the decline was offset by benefits associated with pricing, favorable fixed cost absorption and savings from the Optimizing for Growth program.
During the quarter under discussion, adjusted other selling and administrative expenses increased by $13 million year over year to $322 million. The increase can primarily be attributed to increased higher employee-related expenses.
Balance Sheet
As of Mar 31, 2022, the company’s cash and equivalents were $536.6 million compared with $615.2 million as on Dec 31, 2021. Total inventories as of the end of the first quarter were up 54.7% year over year to $969.2 million.
The company’s long-term debt was $2,322.1 million as of Mar 31, 2022, lower than $2,837.7 million as of Dec 30, 2021. Shareholder’s equity was $1,618.1 million.
Outlook
For 2022, the company continues to anticipate 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 continues to anticipate 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% and 17% of net sales. For 2023, the company continues to expect adjusted EPS to be greater than $1.90.
Zacks Rank & Key Picks
Mattel currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the Consumer Discretionary sector are Funko, Inc. (FNKO - Free Report) , Bluegreen Vacations Holding Corporation and Clarus Corporation (CLAR - Free Report) .
Funko sports a Zacks Rank #1 (Strong Buy) at present. FNKO has a trailing four-quarter earnings surprise of 96.2%, on average. Shares of the company have declined 24.9% in the past year. You can see the complete list of today's Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Funko’s current financial year sales and EPS suggests growth of 22.6% and 26.8%, respectively, from the year-ago period’s reported levels.
Bluegreen Vacations sports a Zacks Rank #1 at present. BVH has a trailing four-quarter earnings surprise of 425.1%, on average. The stock has surged 35.2% in the past year.
The Zacks Consensus Estimate for BVH’s current financial year sales and EPS indicates growth of 8.3% and 20.8%, respectively, from the year-ago period’s reported levels.
Clarus carries a Zacks Rank #2 (Buy). The company has a trailing four-quarter earnings surprise of 12.3%, on average. Shares of the company have increased 5.2% in the past year.
The Zacks Consensus Estimate for CLAR’s 2022 sales and EPS suggests growth of 25.3% and 23.1%, respectively, from the year-ago period’s levels.