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Mattel (MAT) Gears Up for Q2 Earnings: What's in the Offing?
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Mattel, Inc. (MAT - Free Report) is scheduled to report second-quarter 2023 results on July 26, after the closing bell. In the last reported quarter, the company’s earnings beat the Zacks Consensus Estimate by 7.7%.
The Trend in Estimate Revision
The Zacks Consensus Estimate is pegged at a loss of 4 cents per share. MAT reported adjusted earnings of 18 cents per share in the year-ago quarter.
For revenues, the consensus mark is pegged at $989.5 million, suggesting a decline of 19.9% from the year-earlier quarter’s reported figure.
Factors at Play
Dismal North America and international revenues are likely to affect Mattel’s second-quarter 2023 results. This decline is subject to bleak performances of Infant, Toddler and Preschool (including Fisher-Price, and Thomas & Friends), Dolls (including Barbie), Action Figures, Building Sets, Games and Other.
Our model predicts North America and international revenues to decline 22.5% and 17.8% year over year to $588.1 million and $391.7 million, respectively. Further, we expect North America gross billings to decline 23.5% in the quarter to be reported.
The company’s bottom line is likely to have been affected by inventory obsolescence expense, higher input cost inflation, unfavorable fixed cost absorption and higher royalty costs. We estimate MAT’s adjusted gross profit to decline 15% year over year $471.2 million.
However, Mattel is likely to have benefited from robust e-commerce growth and strong demand for Hot Wheels. Also, initiatives to capture full value of its Ips and transform itself into a high-performing toy company are likely to bode well.
Our proven model doesn’t conclusively predict an earnings beat for Mattel this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that's not the case here.
Earnings ESP: Mattel has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Mattel has a Zacks Rank #3.
Stocks Poised to Beat earnings
Here are some stocks from the Zacks Consumer Discretionary space that investors may consider, as our model shows that these have the right combination of elements to post an earnings beat this season.
Shares of Norwegian Cruise have surged 64.8% in the past year. NCLH’s earnings beat estimates in two of the trailing four quarters and missed twice, the average negative surprise being 4%.
MGM Resorts International (MGM - Free Report) has an Earnings ESP of +19.43% and a Zacks Rank #2.
Shares of MGM Resorts have increased 8% in the past year. MGM’s earnings beat estimates in two of the trailing four quarters and missed twice, the average surprise being 81%.
Electronic Arts Inc. (EA - Free Report) has an Earnings ESP of +2.54% and a Zacks Rank #2.
Shares of Electronic Arts have increased 5.9% in the past three months. EA’s earnings beat estimates in two of the trailing four quarters and missed twice, the average surprise being 7.3%.
Image: Bigstock
Mattel (MAT) Gears Up for Q2 Earnings: What's in the Offing?
Mattel, Inc. (MAT - Free Report) is scheduled to report second-quarter 2023 results on July 26, after the closing bell. In the last reported quarter, the company’s earnings beat the Zacks Consensus Estimate by 7.7%.
The Trend in Estimate Revision
The Zacks Consensus Estimate is pegged at a loss of 4 cents per share. MAT reported adjusted earnings of 18 cents per share in the year-ago quarter.
For revenues, the consensus mark is pegged at $989.5 million, suggesting a decline of 19.9% from the year-earlier quarter’s reported figure.
Factors at Play
Dismal North America and international revenues are likely to affect Mattel’s second-quarter 2023 results. This decline is subject to bleak performances of Infant, Toddler and Preschool (including Fisher-Price, and Thomas & Friends), Dolls (including Barbie), Action Figures, Building Sets, Games and Other.
Our model predicts North America and international revenues to decline 22.5% and 17.8% year over year to $588.1 million and $391.7 million, respectively. Further, we expect North America gross billings to decline 23.5% in the quarter to be reported.
The company’s bottom line is likely to have been affected by inventory obsolescence expense, higher input cost inflation, unfavorable fixed cost absorption and higher royalty costs. We estimate MAT’s adjusted gross profit to decline 15% year over year $471.2 million.
However, Mattel is likely to have benefited from robust e-commerce growth and strong demand for Hot Wheels. Also, initiatives to capture full value of its Ips and transform itself into a high-performing toy company are likely to bode well.
Mattel, Inc. Price and EPS Surprise
Mattel, Inc. price-eps-surprise | Mattel, Inc. Quote
What Our Model Says
Our proven model doesn’t conclusively predict an earnings beat for Mattel this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that's not the case here.
Earnings ESP: Mattel has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Mattel has a Zacks Rank #3.
Stocks Poised to Beat earnings
Here are some stocks from the Zacks Consumer Discretionary space that investors may consider, as our model shows that these have the right combination of elements to post an earnings beat this season.
Norwegian Cruise Line Holdings Ltd. (NCLH - Free Report) has an Earnings ESP of +10.43% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Shares of Norwegian Cruise have surged 64.8% in the past year. NCLH’s earnings beat estimates in two of the trailing four quarters and missed twice, the average negative surprise being 4%.
MGM Resorts International (MGM - Free Report) has an Earnings ESP of +19.43% and a Zacks Rank #2.
Shares of MGM Resorts have increased 8% in the past year. MGM’s earnings beat estimates in two of the trailing four quarters and missed twice, the average surprise being 81%.
Electronic Arts Inc. (EA - Free Report) has an Earnings ESP of +2.54% and a Zacks Rank #2.
Shares of Electronic Arts have increased 5.9% in the past three months. EA’s earnings beat estimates in two of the trailing four quarters and missed twice, the average surprise being 7.3%.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.