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Mattel (MAT) to Report Q3 Earnings: What's in the Cards?

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Mattel, Inc. (MAT - Free Report) is scheduled to report third-quarter 2023 results on Oct 25, after the closing bell. In the last reported quarter, the company delivered an earnings surprise of 350%.

How are Estimates Placed?

The Zacks Consensus Estimate for third-quarter earnings per share (EPS) is pegged at 87 cents, indicating an improvement of 6.1% from 82 cents reported in the year-ago quarter.

For revenues, the consensus mark is pegged at nearly $1.8 billion. The metric suggests an improvement of 4.1% from the year-ago quarter’s figure.

Mattel, Inc. Price and EPS Surprise

 

Mattel, Inc. Price and EPS Surprise

Mattel, Inc. price-eps-surprise | Mattel, Inc. Quote

 

Let’s discuss the factors that are likely to be reflected in the quarter to be reported.

Factors to Note

Mattel’s third-quarter top line is likely to have benefitted from a robust assortment of products encompassing core brands, licensed brands and profitable product affiliations. This and the focus on demand creation (in collaboration with retail partners) and the expansion of IP-driven Toy business and entertainment offerings are expected to have aided the company’s performance in the to-be-reported quarter.

Solid contributions from the company’s North America and international segments are likely to have driven the third quarter top line. Our model predicts total North America and international revenues to rise 5.3% and 1.2% year over year to $1,107.1 million and $712.9 million, respectively. We expect North America gross billings to increase 5.5% year over year in the to-be-reported quarter. Our model predicts third-quarter Barbie Worldwide gross billings to increase 7% year over year.

Increased focus on the execution of the Optimizing for Growth program and digital efforts is likely to have aided the company’s performance in the to-be-reported quarter.

However, a challenging macroeconomic environment, cost inflation, unfavorable fixed cost absorption, inventory management efforts (including higher close-out sales and inventory obsolescence) and unfavorable product mix are likely to have impacted the bottom line in the third quarter.

What the Zacks Model Unveils

Our proven model predicts 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.

Earnings ESP: Mattel has an Earnings ESP of +1.15%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: The company carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Stocks Poised to Beat Earnings Estimates

Here are some stocks from the Zacks Consumer Discretionary sector that investors may consider, as our model shows that these have the right combination of elements to post an earnings beat.

Caesars Entertainment, Inc. (CZR - Free Report) has an Earnings ESP of +14.23% and a Zacks Rank #2.

Shares of Caesars Entertainment have declined 0.2% in the past year. CZR’s earnings surpassed the consensus mark in all the trailing four quarters, the average surprise being 74.3%.

Marriott International, Inc. (MAR - Free Report) has an Earnings ESP of +4.23% and a Zacks Rank #3.

Shares of Marriott have gained 21.2% in the past year. MAR’s earnings surpassed the consensus mark in all the trailing four quarters, the average surprise being 5.5%.

Boyd Gaming Corporation (BYD - Free Report) has an Earnings ESP of +2.48% and a Zacks Rank #3.

Shares of Boyd Gaming have gained 10.7% in the past year. BYD’s earnings surpassed the consensus mark in all the trailing four quarters, the average surprise being 12.2%.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.

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