Bad News Barbie
$MAT dropped nearly 11% at the open of trading Friday morning after revealing sales fell during the holiday season.
Worldwide sales dropped 6% in the fourth quarter to $2.2 Billion, compared to the 2013 holiday season. Year-over-year EPS rose two cents to $1.07, but still missed Wall Street consensus of $1.20. Sales of Barbie, one of the toy company’s biggest sellers, dropped 13% in the quarter.
Jan. 31 at 8:14 AM
Mattel Chairman and CEO Bryan Stockton attributed some of the weakness to a “challenging” U.S. retail climate.
“Overall, the global toy industry held up pretty well, but we did not meet our growth expectations for the fourth quarter, or the full year, mainly driven by weakness in the U.S. market.”
Analysts at Wells Fargo downgraded the stock to Market Perform from Out Perform following the results. They lowered their price target range to $40-$42 from $51 to $53.
Jan. 31 at 10:32 AM
Some investors are avoiding all toy and games stocks on concern that the U.S. economy is not as strong as The Federal Reserve and others say. Though the economy grew 3.2% in the fourth quarter, according to numbers released yesterday by the Department of Commerce, purchase growth by U.S. residents is declining. Consumer purchases grew 1.8% in the fourth quarter compared to the fourth quarter in 2013. Purchases had grown 3.9% year-over-year in the third quarter.
Jan. 17 at 4:09 PM
The market may have been more difficult for Mattel than others. The toy manufacturer and marketer has seen increased competition from MGA Entertainment, makers of the Bratz dolls and The Little Tikes line.
To be sure, the doll business hasn’t been all declines for the company. Sales of its Disney Princess line grew 12% worldwide. Revenues from its American Girl doll line climbed 3% in the quarter.
Still, some cashtaggers said they would play in the toy business with another stock such as $HAS—despite it trading down Friday morning on concerns that Mattel’s weakness indicated industry-wide declines.
Jan. 31 at 9:53 AM
~ via Catherine Holahan (@cholahan)
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