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Mattel Launches Hot Wheels Mario Kart Cars to Drive Sales (Revised)

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Mattel, Inc. (MAT - Free Report) and Nintendo (NTDOY - Free Report) are entering a partnership, where they are globally launching a new line of Hot Wheels Mario Kart die-cast vehicles and track sets. Starting in summer 2019, these cars and track sets will be available at retailers in select markets.

These cars are 1:64 scale replicas of the iconic Mario Kart characters. Additionally, Hot Wheels is developing tracks for these cars to race around. The three game-inspired sets, which are being launched, include Piranha Plant slide track set, Thwomp Ruins track set and Hot Wheels Mario Kart track set. On the first release, there will be cars for Mario, Yoshi, Luigi and Bowser, with additional characters coming later such as Princess Peach, Koopa Troop and Toad.

Mattel has been evidently pressing ahead with its Hot Wheels category of late. The company recently launched Hot Wheels id, which features Smart Track, Race Portal and Hot Wheels id vehicles. Also, the new Hot Wheels id provides users a mixture of digital and physical play. Users can now track speed, count laps and have a virtual garage.

Why is Mattel Focusing on Enhancing Hot Wheels?

As is known, Mattel has been struggling with a dismal top-line performance for quite some time now. In order to revive sales, the company is continuously trying to focus on innovation and product launch. Particularly, it is building strong product lineup for its core and licensed brands.  Owing to its popularity among children, the company’s premier brand like Hot Wheels has been the category leader in multiple product segments for several years.

In the first quarter of 2019, gross sales at the Hot Wheels brand increased 4% on a reported basis and 9% in constant currency, courtesy of Hot Wheels' 50th anniversary. Also, in 2018, worldwide gross sales for the brand were up 9% and reached highest annual sales in its 50-year history. Global POS were also up by a high-single digit for the year.

Bottom Line

We believe that the launch of the Hot Wheels Mario Kart die-cast vehicles will help Mattel combat its long-standing trend of declining sales. Notably, the company has not been able to revive sales yet despite undertaking innumerable strategies.

Mattel, like Hasbro (HAS - Free Report) and JAKKS Pacific (JAKK - Free Report) , is expected to keep shouldering the Toys ‘R’ Us liquidation effect in the near term. In fact, owing to the liquidation, Mattel’s net revenues in the first quarter of 2019 declined 3% year over year.

 

Meanwhile, a look at the company’s price trend reveals that the stock has had an unimpressive run on the bourses in the past year. Shares of this Zacks Rank #3 (Hold) company have lost 35.3% compared with the industry’s decline of 29.8% in the same time frame.

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

(We are reissuing this article to correct a mistake. The earlier article on this topic, issued on June 21, 2019, should no longer be relied upon.)


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