Mattel And Warner Bros Extend Global Licensing Agreement

Mattel, Inc. (NASDAQ:MAT) has announced the extension of its global licensing agreement with Warner Bros. Consumer Products, which licenses the rights for all the intellectual properties in Warner Bros. Entertainment’s. Per the terms of the deal, Mattel will continue to be the toy licensee for DC in the girls, preschool, vehicles, games and novelty toy categories.

The agreement will help in the expansion of DC Universe franchises and production of new for “DC Super Hero Girls.” Mattel and DC have been partners for more than 15 years now. Apart from DC, Mattel has licensing agreement with Disney, Universal Pictures, Nickelodeon, WWE, Microsoft (NASDAQ:MSFT) and others.

We believe licensing partnership will prove conducive to Mattel, which has been suffering from declining sales due Toys ‘R’ Us liquidation and slowdown in China operation. Since the U.S. toy market is somewhat saturated, toy companies are exploring growth opportunities abroad.

Moreover, in the beginning of 2019, Mattel entered into an agreement with Warner Bros. Pictures Group to work on a live-action feature film. This move is aimed at bringing the popular Barbie franchise to theaters. In the film, Academy Award-nominated actress Margot Robbie is likely to portray as Barbie. Robbie will co-produce the live-action feature film along with Tom Ackerley and Josey McNamara under her LuckyChap Entertainment Banner.

This Zacks Rank #3 (Hold) company’s consistent efforts to improve its point of sale while managing its costs coupled with strategic partnerships and expansion in international markets too bode well.

Price Performance

Year to date, shares of Mattel have gained 9.8% compared with the industry’s 5.4% growth.

Given a strong product line-up, which includes core brands, licensed brands and lucrative product associations, Mattel remains well positioned for growth. Owing to its popularity among young boys and girls, the company’s premier brand like Hot Wheels has been the category leader in the multiple product segments for several years. Mattel has also forayed into other consumer product categories such as apparel, fashion and accessories to build the brands.

Key Picks

Better-ranked stocks worth considering in the same space include Electronic Arts Inc. (NASDAQ:EA) , Glu Mobile Inc. (NASDAQ:GLUU) and Hasbro, Inc. (NASDAQ:HAS) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Electronic Arts, Glu Mobile and Hasbro has an impressive long-term earnings growth rate of 16.5%, 15% and 10.7%, respectively.

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