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Mattel (MAT) Tops Industry in the Past Six Months: Here's Why

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Mattel, Inc. (MAT - Free Report) has performed impressively in the past six months. Within the time frame, the company’s shares have increased 16.2% compared with the industry’s growth of 7.5%. The company is benefiting from robust North America sales, a highly-efficient supply chain and strong demand for its products.

The Zacks Rank #2 (Buy) company’s revenues and earnings for 2022 are likely to witness a growth of 8.1% and 13.9%, year over year, respectively. In the past 60 days, earnings estimates for 2022 witnessed upward revisions of 3 cents to $1.48 per share.

Factors Driving Growth

The company is benefiting from robust North America sales. During the first quarter, gross billings surged 25% (as reported and at constant currency or cc) year over year in North America. The upside can be attributed to an increase in sales of 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 at cc.

Barbie brand continues to instill investors’ confidence with solid performance. In the first quarter, Barbie brand’s worldwide gross billings witnessed an improvement of 8% on a reported basis and 12% at cc. Per NPD, Barbie strengthened its position as the number one Global Doll brand in 2021 for the second consecutive year. Going forward, the brand has new fashion segments like Barbie EXTRA and Ken Turned 60 in its pipeline. Meanwhile, the company plans to develop Barbie Fashion Battle, a reality show where designers compete for the chance to create a fashion collection for Barbie.

Strong Hot Wheels sales are also supporting the company’s performance. During first-quarter 2022, gross billings at the Hot Wheels brand rose 31% (on a reported basis) and 36% (at cc) year over year. The company has been witnessing an improving sales trend for Hot Wheels and is quite confident about the brand’s long-term prospects. The company announced that J.J. Abrams' Bad Robot would produce the Hot Wheels movie.

Given a strong product line-up, including core brands, licensed brands and lucrative product associations, Mattel remains well-positioned for growth. Owing to its popularity among young boys and girls, the company’s premier brand Hot Wheels has been the category leader in multiple product segments for several years. Continued strategic investments in the brand are likely to keep widening the depth of fun kids can have with Hot Wheels. Mattel has also forayed into other consumer product categories such as apparel, fashion and accessories to build the brands.

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Other Key Picks

Some other top-ranked stocks in the Consumer Discretionary sector are Civeo Corporation (CVEO - Free Report) , Bluegreen Vacations Holding Corporation (BVH - Free Report) and Funko, Inc. (FNKO - Free Report) .

Civeo sports a Zacks Rank #1 (Strong Buy) at present. The company has a trailing four-quarter earnings surprise of 1,565.1%, on average. Shares of the company have soared 61.3% in the past year. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for CVEO’s 2022 sales and earnings per share (EPS) suggests growth of 12.5% and 1,450%, respectively, from the year-ago period’s levels.

Bluegreen Vacations carries a Zacks Rank #2. BVH has a trailing four-quarter earnings surprise of 85.9%, on average. The stock has surged 33% in the past year.

The Zacks Consensus Estimate for BVH’s current financial year sales and EPS indicates growth of 11.2% and 35.1%, respectively, from the year-ago period’s reported levels.

Funko carries a Zacks Rank #2. FNKO has a trailing four-quarter earnings surprise of 78.7%, on average. Shares of the company have declined 6% in the past year.

The Zacks Consensus Estimate for Funko’s current financial year sales and EPS suggests growth of 26.8% and 31%, respectively, from the year-ago period’s reported levels.