Key Takeaways
- The Estimize consensus is calling for EPS of -$0.07 on $863.99 million in revenue, 2 cents below Wall Street on the bottom-line and $9 million greater in sales
- This quarter, and perhaps future quarters, is expected to fall short after Mattel (NASDAQ:MAT) and Disney severed ties over the Princess line.
- Mattel’s three biggest reporting segments include Barbie, Hot Wheels and Fisher-Price
- What are you expecting for MAT?
Leading toymaker, Mattel, is scheduled to report first quarter earnings after the market closes this Wednesday. If Hasbro’s better than expected earnings earlier this week are any indication of the state of toys, Mattel is in for a good week. The stock has been a strong performer lately, rising 26.51% in the past 12 months and 24.53% since the start of the year. Upbeat share prices have been driven by robust Barbie sales and speculation over a merger with Hasbro (NASDAQ:HAS). Mattel’s beat last quarter was highlighted by a 8% increase in Barbie sales, 13% increase in Fischer-Price products and a resounding 28% rise in Hot Wheels toys, all on a constant currency basis. Unfortunately, the first quarter isn’t as robust as the holiday season and expectations have been generally subdued for Mattel this quarter.
The Estimize consensus is calling for EPS of -$0.07 on $863.99 million in revenue, 2 cents below Wall Street on the bottom-line and $9 million greater in sales. Our Select Consensus, on the other hand, is expecting a loss of 1 cent and modes beat of $3 million. Compared to a year earlier, earnings are predicted to rise by 21% on a 6% fall in sales . On average, Mattel sees marginal price movements leading up to and through earnings. In the month prior to results the stock typically falls 2% but then increases 2% in the month after earnings.
Currently, Mattel’s 3 biggest reporting divisions are Barbie, Fisher-Price and Hot Wheels. The Barbie brand is critical to the company’s financial performance, accounting for almost 15% of revenue in any given quarter. The iconic doll has recently gone through a transformation and now comes in three different sizes including petite, tall and curvy. After losing out on a massive deal with Disney, the barbie sector remains Mattel’s best hope to stay competitive in the broader doll market. Earlier this year, Mattel lost the global licensing rights on the Disney Princess line to direct competitor, Hasbro. The severed tie is expected to cost Mattel $450 million in sales or about 8% of its total revenue. Fisher-Price and Hot Wheels, on the other hand, are expected to continue their upward trajectories. Unfortunately, growth in its three core sectors won’t be enough to reconcile the lost Disney partnership just yet.