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Mattel, Inc.

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Mattel’s sales initiatives and new partnerships to counter competition from electronic toys and tablets are finally yielding results. The Barbie, Fisher-Price and Hot Wheels brands recorded strong sales in the fourth quarter, especially in the holiday season. Barbie’s sales rose mainly on the back of the interactive Hello Barbie doll and the Fashionista line of dolls featuring several ethnicities and skin tones. The company’s renewed contracts of toy franchisees for Cars 3 and Toy Story 4, set to release in 2017 and 2018, respectively, are also expected to significantly boost the top line. However, despite ending 2015 on a strong note,  we believe it will take time for all the brands to show consistent improvement. Meanwhile, the costs related to clearing inventories and boosting sales are expected to keep profits under pressure, going forward. Moreover, foreign exchange translation remains a headwind.

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