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Mattel, Inc. (MAT - Free Report) reported fourth-quarter 2023 results, wherein earnings and revenues missed the Zacks Consensus Estimate. However, the top and bottom lines increased on a year-over-year basis.
The company’s quarterly results reflect growth, driven by its diverse product offerings primarily in the North America segment. Success from the Barbie movie as well as notable progress in entertainment across film, television, digital and publishing bode well. However, this uptrend was partially offset by currency fluctuation risks.
Exceeding the quarter’s Optimizing for Growth cost savings program target was encouraging, thus positioning Mattel well to continue focusing on growing its IP-driven toy business and expand the entertainment offering through 2024.
Following the announcement, MAT’s shares increased 1.5% in the after-hour trading session on Feb 7.
Earnings & Revenue Discussion
In the quarter under review, the company reported adjusted earnings per share (EPS) of 29 cents, lagging the Zacks Consensus Estimate of 30 cents by 3.3%. The reported figure showcased 61.1% growth from the prior-year quarter’s adjusted EPS of 18 cents.
Net sales during the quarter amounted to $1.62 billion, missing the consensus estimate of $1.66 billion by 2.2%. The top line increased 16% (on a reported basis) and 14% (on a constant-currency or cc basis), year over year.
Net sales in the North America segment increased 32% year over year on a reported basis and at cc. The International segment’s net sales increased 3% (as reported) but declined 2% (at cc) year over year. During the quarter, net sales in the American Girl segment dropped 6% year over year on a reported basis and at cc.
In the North America segment, gross billings increased 33% (as reported and at cc) year over year.
Gross billings in the International segment increased 7% (on a reported basis) and 2% (at cc) year over year. The segment benefited from the solid performances of Dolls (including Disney Princess and Disney Frozen, Monster High, and Barbie) and Vehicles (mainly Hot Wheels). This was partially negated by the dismal performances of Action Figures, Building Sets, Games and Other (primarily Action Figures), along with Infant, Toddler, and Preschool (primarily Fisher-Price).
The quarter’s gross billings in the American Girl segment decreased 5% (as reported and 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 Other.
Worldwide gross billings by Mattel Power Brands increased 18% (on a reported basis) and 16% (at cc) year over year to $ 1.84 billion. The Barbie brand witnessed a rise of 27% (on a reported basis) and 24% (at cc) year over year.
Gross billings at the Hot Wheels brand rose 19% (on a reported basis) and 16% (at cc) year over year. Gross billings at Fisher-Price were up 13% (on a reported basis) and 11% (at cc) year over year. Gross billings at Other increased 14% (on a reported basis) and 12% (at cc) year over year.
Operating Results
During the fourth quarter of 2023, Mattel’s adjusted gross margin was 48.8%, up 570 basis points (bps) year over year. The upside was attributed to benefits related to the Barbie movie, pricing, favorable mix, savings from the Optimizing for Growth program, net of higher sales adjustments and cost deflation. However, unfavorable fixed cost absorption and supply-chain costs partially offset the positives.
During the quarter under discussion, adjusted other selling and administrative expenses increased 45% year over year to $408.8 million, and grew 510 bps as a percentage of net sales. The increase was mainly driven by higher incentive compensation.
2023 in a Glance
In 2023, Mattel’s net sales were flat (on a reported basis) and declined 1% (on a constant-currency or cc basis), year over year. It reported adjusted EPS of $1.23 in 2023, down from EPS of $1.25 reported in 2022.
During the year, Worldwide gross billings by Mattel Power Brands increased 1% (on a reported basis) but decreased 1% (at cc) year over year to $ 6.1 billion.
Adjusted gross margin was 47.5%, up 160 bps year over year. Adjusted other selling and administrative expenses increased 12% year over year to $1.42 billion, and grew 260 bps as a percentage of net sales
Balance Sheet
As of Dec 31, 2023, cash and cash equivalents were $1.26 billion compared with $761.2 million as of 2022 end. Total inventories at the end of the fourth quarter were $571.6 million compared with $894.1 million reported in the year-ago quarter.
Long-term debt (as of Dec 31, 2023) was $2.33 billion, on par with the reported value in 2022 end. Shareholders’ equity was $2.15 billion as of Dec 31, 2023.
2024 Outlook
For 2024, the company expects net sales to be comparable with the prior year on a constant currency basis.
The company expects adjusted gross margin to be in the range of 48.5-49%. Adjusted EBITDA is projected to be in the range of $975-$1,025 million.
Capital expenditures are expected to be in the range of $175-$200 million compared with $160 million reported in 2023. Mattel anticipates 2023 adjusted EPS to be between $1.35 and $1.45.
Hilton Worldwide Holdings Inc. (HLT - Free Report) reported impressive fourth-quarter 2023 results, wherein earnings and total revenues topped the Zacks Consensus Estimate and increased on a year-over-year basis.
The company’s quarterly results notably benefited from solid improvement in revenue per available room (RevPAR) on the back of increased occupancy rates and average daily rate (ADR). Furthermore, during the quarter, HLT witnessed a record number of openings, which encouraged the uptrend to a great extent. The company states that it is well-positioned to continue driving innovation and growth through 2024, owing to the improving trends.
Royal Caribbean Cruises Ltd. (RCL - Free Report) reported mixed fourth-quarter 2023 results, with earnings beating the Zacks Consensus Estimate but revenues missing the same. However, the top and the bottom line increased on a year-over-year basis.
The quarterly results reflect unprecedented demand for the brands from new and loyal guests. The company reported record bookings, both in terms of rate and volume. Going forward, the management emphasized delivering long-term shareholder value through industry-leading global brands, innovative fleets and diverse destinations. The company anticipates achieving two Trifecta goals ahead of schedule.
Las Vegas Sands Corp. (LVS - Free Report) reported mixed fourth-quarter 2023 results, with earnings missing the Zacks Consensus Estimate but revenues beating the same. The top and the bottom line increased on a year-over-year basis.
The company reported continued improvement in the operating environment in Macao and Singapore. In Macao, the company reported a sustained recovery across each of its segments. Singapore’s Marina Bay Sands demonstrated solid financial and operational performance. The introduction of new suite options and improved services is in line with the improving airlift capacity and the continuous recovery in travel and tourism spending, especially from China and the broader region.
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Mattel (MAT) Q4 Earnings & Revenues Miss, Gross Billings Up Y/Y
Mattel, Inc. (MAT - Free Report) reported fourth-quarter 2023 results, wherein earnings and revenues missed the Zacks Consensus Estimate. However, the top and bottom lines increased on a year-over-year basis.
The company’s quarterly results reflect growth, driven by its diverse product offerings primarily in the North America segment. Success from the Barbie movie as well as notable progress in entertainment across film, television, digital and publishing bode well. However, this uptrend was partially offset by currency fluctuation risks.
Exceeding the quarter’s Optimizing for Growth cost savings program target was encouraging, thus positioning Mattel well to continue focusing on growing its IP-driven toy business and expand the entertainment offering through 2024.
Following the announcement, MAT’s shares increased 1.5% in the after-hour trading session on Feb 7.
Earnings & Revenue Discussion
In the quarter under review, the company reported adjusted earnings per share (EPS) of 29 cents, lagging the Zacks Consensus Estimate of 30 cents by 3.3%. The reported figure showcased 61.1% growth from the prior-year quarter’s adjusted EPS of 18 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 $1.62 billion, missing the consensus estimate of $1.66 billion by 2.2%. The top line increased 16% (on a reported basis) and 14% (on a constant-currency or cc basis), year over year.
Net sales in the North America segment increased 32% year over year on a reported basis and at cc. The International segment’s net sales increased 3% (as reported) but declined 2% (at cc) year over year. During the quarter, net sales in the American Girl segment dropped 6% year over year on a reported basis and at cc.
In the North America segment, gross billings increased 33% (as reported and at cc) year over year.
Gross billings in the International segment increased 7% (on a reported basis) and 2% (at cc) year over year. The segment benefited from the solid performances of Dolls (including Disney Princess and Disney Frozen, Monster High, and Barbie) and Vehicles (mainly Hot Wheels). This was partially negated by the dismal performances of Action Figures, Building Sets, Games and Other (primarily Action Figures), along with Infant, Toddler, and Preschool (primarily Fisher-Price).
The quarter’s gross billings in the American Girl segment decreased 5% (as reported and 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 Other.
Worldwide gross billings by Mattel Power Brands increased 18% (on a reported basis) and 16% (at cc) year over year to $ 1.84 billion. The Barbie brand witnessed a rise of 27% (on a reported basis) and 24% (at cc) year over year.
Gross billings at the Hot Wheels brand rose 19% (on a reported basis) and 16% (at cc) year over year. Gross billings at Fisher-Price were up 13% (on a reported basis) and 11% (at cc) year over year. Gross billings at Other increased 14% (on a reported basis) and 12% (at cc) year over year.
Operating Results
During the fourth quarter of 2023, Mattel’s adjusted gross margin was 48.8%, up 570 basis points (bps) year over year. The upside was attributed to benefits related to the Barbie movie, pricing, favorable mix, savings from the Optimizing for Growth program, net of higher sales adjustments and cost deflation. However, unfavorable fixed cost absorption and supply-chain costs partially offset the positives.
During the quarter under discussion, adjusted other selling and administrative expenses increased 45% year over year to $408.8 million, and grew 510 bps as a percentage of net sales. The increase was mainly driven by higher incentive compensation.
2023 in a Glance
In 2023, Mattel’s net sales were flat (on a reported basis) and declined 1% (on a constant-currency or cc basis), year over year. It reported adjusted EPS of $1.23 in 2023, down from EPS of $1.25 reported in 2022.
During the year, Worldwide gross billings by Mattel Power Brands increased 1% (on a reported basis) but decreased 1% (at cc) year over year to $ 6.1 billion.
Adjusted gross margin was 47.5%, up 160 bps year over year. Adjusted other selling and administrative expenses increased 12% year over year to $1.42 billion, and grew 260 bps as a percentage of net sales
Balance Sheet
As of Dec 31, 2023, cash and cash equivalents were $1.26 billion compared with $761.2 million as of 2022 end. Total inventories at the end of the fourth quarter were $571.6 million compared with $894.1 million reported in the year-ago quarter.
Long-term debt (as of Dec 31, 2023) was $2.33 billion, on par with the reported value in 2022 end. Shareholders’ equity was $2.15 billion as of Dec 31, 2023.
2024 Outlook
For 2024, the company expects net sales to be comparable with the prior year on a constant currency basis.
The company expects adjusted gross margin to be in the range of 48.5-49%. Adjusted EBITDA is projected to be in the range of $975-$1,025 million.
Capital expenditures are expected to be in the range of $175-$200 million compared with $160 million reported in 2023. Mattel anticipates 2023 adjusted EPS to be between $1.35 and $1.45.
Zacks Rank & Recent Consumer Discretionary Releases
Mattel currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks Rank #1 (Strong Buy) stocks here.
Hilton Worldwide Holdings Inc. (HLT - Free Report) reported impressive fourth-quarter 2023 results, wherein earnings and total revenues topped the Zacks Consensus Estimate and increased on a year-over-year basis.
The company’s quarterly results notably benefited from solid improvement in revenue per available room (RevPAR) on the back of increased occupancy rates and average daily rate (ADR). Furthermore, during the quarter, HLT witnessed a record number of openings, which encouraged the uptrend to a great extent. The company states that it is well-positioned to continue driving innovation and growth through 2024, owing to the improving trends.
Royal Caribbean Cruises Ltd. (RCL - Free Report) reported mixed fourth-quarter 2023 results, with earnings beating the Zacks Consensus Estimate but revenues missing the same. However, the top and the bottom line increased on a year-over-year basis.
The quarterly results reflect unprecedented demand for the brands from new and loyal guests. The company reported record bookings, both in terms of rate and volume. Going forward, the management emphasized delivering long-term shareholder value through industry-leading global brands, innovative fleets and diverse destinations. The company anticipates achieving two Trifecta goals ahead of schedule.
Las Vegas Sands Corp. (LVS - Free Report) reported mixed fourth-quarter 2023 results, with earnings missing the Zacks Consensus Estimate but revenues beating the same. The top and the bottom line increased on a year-over-year basis.
The company reported continued improvement in the operating environment in Macao and Singapore. In Macao, the company reported a sustained recovery across each of its segments. Singapore’s Marina Bay Sands demonstrated solid financial and operational performance. The introduction of new suite options and improved services is in line with the improving airlift capacity and the continuous recovery in travel and tourism spending, especially from China and the broader region.