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Soft Power Brand Sales Likely to Hurt Mattel (MAT) Q4 Earnings

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Mattel, Inc. MAT is scheduled to report fourth-quarter 2019 results on Feb 13, after the closing bell. In the last reported quarter, the company’s earnings surpassed the Zacks Consensus Estimate by 225%.

Q4 Estimates

The Zacks Consensus Estimate for fourth-quarter pegged at break-even, indicating a decline from the year-ago figure of an earnings of 4 cents. Over the past 30 days, the company’s earnings estimates have declined by a penny. For quarterly revenues, the consensus mark stands at $1,489 million, suggesting a decline of 2.3% from prior-year reported figure.

Factors at Play

Dismal worldwide gross sales of Power Brands are likely to affect the company’s fourth-quarter results. The Zacks Consensus Estimate for Power Brands total revenues is $1,029 million, indicating a decline of nearly 14%. Moreover, softness in North America sales is likely to have persisted in the quarter. North America gross revenues are expected to decrease 0.5% to $741 million.

The company has been focusing on advertising, marketing and promotional activities to improve POS momentum and drive sales. Despite growing pipeline of tech-enabled products that capitalize on new play patterns, the company might have failed to revive sales in the fourth quarter.

Moreover, consensus estimate for international gross revenues is pegged at $808 million, indicating a decline of 0.4% from the year-ago quarter.

High costs and stiff competition from an array of alternative modes of entertainment including video games, MP3 players, tablets, smartphones and other electronic devices are likely to have weighed on the fourth-quarter performance.

Mattel, Inc. Price and EPS Surprise

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 chances of an earnings beat.

You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Mattel has an Earnings ESP of +850.00% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Other Stocks Poised to Beat Earnings Estimates

Here are some stocks from the Zacks Consumer Discretionary space that investors may also consider, as our model shows that these have the right combination of elements to deliver an earnings beat in fourth-quarter 2019.

Norwegian Cruise Line Holdings Ltd. NCLH has an Earnings ESP of +0.41% and a Zacks Rank #3.

Boyd Gaming Corporation BYD has an Earnings ESP of +2.13% and a Zacks Rank #3.

Melco Resorts & Entertainment Limited (MLCO - Free Report) has an Earnings ESP of +11.34% and a Zacks Rank #3.

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