MATTEL forecast 2024 adjusted profit above market expectations and announced a US$1 billion share buyback programme as the Barbie parent benefits from its cost-saving measures.
Lower input costs as well as inventory-trimming measures helped drive another quarter of gross margins gains for the company.
Mattel also announced a new cost savings programme focused on streamlining its supply chain, and forecast full-year adjusted earnings per share between US$1.35 and US$1.45, largely above the LSEG estimate of US$1.37.
“Our guidance emphasises growth and profitability, gross margin expansion and … strong cash generation,” CEO Ynon Kreiz told Reuters.
Gross margins in the quarter ended Dec 31, 2023 were up 580 basis points, improving on a 280 basis points rise in the third-quarter.
Shares of Mattel were up marginally in extended trading.
Toy demand disappoints
Mattel missed market estimates for holiday-quarter sales and profit, and forecast tepid 2024 sales as soft demand for toys overshadowed gains from its blockbuster Barbie movie.
“We expect 2024 to also be soft but better than 2023 as trends will continue to improve,” CEO Ynon Kreiz told Reuters.
Mattel forecast 2024 net sales in-line with US$5.44 billion reported in 2023 — shy of market expectations of a rise of 1.4 per cent.
Net sales in the fourth quarter rose 16 per cent to US$1.62 billion, but missed Street expectations of an 18.5 per cent rise to US$1.66 billion.
Excluding items, adjusted profit per share came in at 29 cents, up from 18 cents a year earlier, missing analysts’ expectation of a profit of 31 cents.
“While the Barbie movie continues to provide a boost to Mattel, the company’s overall results were weighed down by the broader toy industry’s struggles,” said Insider Intelligence analyst Zak Stambor. REUTERS
