Mattel, Hasbro results show diverging post-Toys R Us paths
Quarterly reports from Mattel and Hasbro show that while the demise of Toys R Us has shaken up the industry, the two dominant toymakers’ paths are diverging less than a year later.
Late Thursday, Mattel posted betterthan-expected earnings per share and revenue for the key holiday quarter, sending its shares up sharply. The maker of Barbies and Hot Wheels named a new CEO last April and has launched a restructuring that is starting to take hold, analysts said.
For the three months ended in December, Mattel swung to a profit of $14.9 million, or 4 cents per share, after posting a loss a year earlier. Revenue of $1.52 billion was down 5 percent year over year, but topped estimates. The loss of Toys R Us - which liquidated its stores in the spring lead to an 8 percent drop in sales, while a slowdown in China contributed to a 2 percent headwind.
Still, El Segundo, California-based Mattel Inc. reported that it achieved $521 million in savings during the fourth quarter and expects to exceed its savings target of at
least $650 million this year. Under its restructuring program it’s cutting 2,200 jobs worldwide, mainly office workers.
“While it’s still early days of the turnaround and there are areas to improve (Fisher Price, American Girl, etc.), we’re encouraged by the early signs of progress and think delivering above-plan cost savings should help as we enter 2019,” Citi analyst Gregory Badishkanian wrote in a note to investors.
Its stock rallied 21 percent in afternoon trading Friday, to $15. That puts it up 50 percent in the year to date. (RTRS)