Mattel forecasts full-year earnings above estimates as toy demand holds strong By Reuters



© Reuters. FILE PHOTO: The Mattel logo is seen on a toy for sale in the Kidding Around toy store Manhattan, New York City, U.S., November 23, 2021. REUTERS/Andrew Kelly

By Deborah Mary Sophia and Uday Sampath Kumar

(Reuters) – Mattel Inc (NASDAQ:) forecast full-year profit above estimates on Wednesday, with the company confident robust demand for its Barbie dolls and other toys will help it weather rampant supply chain disruptions, sending its shares up about 6% in extended trading.

Demand for toys has surged to a record high over the last year thanks to homebound parents looking to keep their children entertained indoors during the pandemic, helping toymakers such as Mattel raise prices to counter surging costs without fear of much consumer pushback.

Mattel’s holiday-quarter revenue jumped 10% to about $1.80 billion, beating analysts’ estimates of $1.66 billion, despite factory closures and supply disruptions caused by the spread of the Omicron coronavirus variant.

Even as supply chain bottlenecks and surging raw material costs show no signs of easing, Mattel Chief Executive Ynon Kreiz told Reuters he was confident the company had enough options to navigate the issues, including potentially raising prices further.

“We are not necessarily expecting supply chain disruptions to go away, but we do expect to be able to navigate further disruption if it comes,” he said.

Earlier this week, rival Hasbro Inc (NASDAQ:) warned of a hit to its profit margins this year, due to surging supply costs.

Mattel expects adjusted 2022 profit of $1.42 to $1.48 per share, above estimates of $1.39 per share, according to Refinitiv IBES. It forecast net sales to rise between 8% and 10% on a constant currency basis.

The toymaker also lifted its 2023 net sales growth forecast to high single digits from a previous outlook of mid-single-digit growth.

An added lift to sales in 2023 will likely come from Mattel winning back the lucrative rights to make dolls based on Disney Princesses, with Kreiz saying he expects revenue from the toy line to grow past current levels.

Hasbro, which has held the Disney Princess license since 2016, has on average generated about $250 million in revenue per year from the business.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

Share

Leave a Reply

Your email address will not be published.

GIPHY App Key not set. Please check settings