Sturdy shopper demand resulted in “greatest efficiency in years”.
The holiday shopping season brought Mattel its best year-end quarter in more than a dozen years after toy sales rose double digits and outperformed the industry, CEO Ynon Kreiz told CNBC’s Jim Cramer on Wednesday.
In its fourth quarter report released after Tuesday’s close of trading, Mattel had sales of $ 1.6 billion, up 10% from the year-ago quarter. It’s the first time since 2006 that the toy manufacturer’s sales jumped double-digit in a vacation quarter, when the number rose more than 14%.
“This was an exceptional quarter for Mattel, with our best performance in years of strong consumer demand and another milestone year for the company,” said Kreiz in a Mad Money interview.
The performance, which followed double-digit growth in the third quarter, is a sign that the company’s multi-year reorganization plan, led by Kreiz, is producing results. He stressed that the company is also improving cash flow.
Mattel had its first year of growth since 2013, when sales were just under $ 6.5 billion. For the 2020 calendar year, Mattel had sales of $ 4.58 billion, nearly 2% more than 2019, and net income of $ 127 million, the company’s first profitable year since 2016, according to FactSet. The results were better than forecasted by the analysts.
Barbie had the best growth in the Mattel product lines, with sales increasing 16% year over year.
“It’s not just about the quarter or the year,” said Kreiz, who became managing director in the first half of 2018. “It’s about the multi-year strategy that is being followed very well and that puts us in a strong position to continue.” to increase profitability and accelerate our growth in 2021 and beyond. “
This multi-year strategy provides a list of goals including how to restore viability and revenue growth in the short to medium term, while capturing the full value of intellectual property in the medium to long term.
Building an online retail and e-commerce strategy and producing films with Mattel brands are part of the company’s long-term vision.
The company launched a film and television division in 2018 and has more than 50 projects in the works, some of which are currently in production and many are in development.
Projects include a Uno live-action movie, a Whac-A-Mole game show, and a Thomas & Friends series, Kreiz said.
“This is part of our medium to long-term strategy,” said Kreiz. “These projects take time, given the scale and ambition, but we are well on track to deliver and it can be transformative to success.”
Looking ahead, Mattel expects sales to grow in the mid- to single-digit range this year, provided there is no impact on the coronavirus and other economic uncertainties. The company plans to spend between $ 125 million and $ 150 million on investments and other priorities.
Despite the strong quarterly report, Mattel shares fell 2% to $ 18.47 on Wednesday. Since the start of the year, the stock has risen nearly 6%.