Get the Latest Investment Ideas Delivered Straight to Your Inbox. Subscribe


It's Beginning to Look a Lot Like Christmas for Mattel Shareholders

Share on Stocktwits


Shares of Mattel Inc. traded 11% higher after the company reported Q3/20 financial results that included a 10% growth in net sales and a 348% increase in net income compared to the same period last year.

After U.S. markets closed for trading yesterday afternoon, toy maker Mattel Inc. (MAT:NASDAQ) announced its third quarter 2020 financial results for the period ended September 30, 2020.

The company's Chairman and CEO Ynon Kreiz stated, "This was a very strong quarter for Mattel. We saw a major upswing in topline and a significant increase in profitability as we continued to make meaningful progress towards becoming an IP-driven, high-performing toy company. The toy industry, as a whole, grew significantly and continues to demonstrate its resilience in challenging economic times. Mattel's growth outpaced the industry as we gained share in key markets around the world and achieved growth in each of our four regions."

"Based on the POS momentum we are seeing, the low retail inventories and the early start of the holiday shopping season, we expect Net Sales and Gross Sales to grow in the fourth quarter. Looking to the full year, with continued operational savings and margin expansion, we expect to see strong Net Income and EBITDA growth and remain focused on creating long-term shareholder value," Kreiz added.

Mattel's CFO Anthony DiSilvestro commented, "We had an outstanding quarter with results exceeding our expectations. In spite of the pandemic, we have continued to make meaningful progress towards our strategy to restore profitability and regain topline growth. We are very pleased with the continuing improvements in Gross Margin, a key driver of our overall financial performance, as we continue to benefit from our cost savings programs. We believe we are well-positioned to maintain this momentum."

The company reported that net sales in Q3/20 increased by 10% (11% in constant currency) to $1.632 billion, compared to $1.482 billion in Q3/19. The firm stated that operating income in Q3/20 was $384.2 million and adjusted operating income was $401.3 million, representing increases of 156% and 131%, respectively, versus Q3/19.

Mattel reported that in Q3/20 earnings per share (EPS) increased by 355% to $0.91, compared to EPS of $0.20 in Q3/19. The company added that adjusted EPS in the quarter was $0.95, compared to $0.26 in the prior year's corresponding quarter which represented a 265% improvement.

Mattel advised that its highest priority has been to insure the health and safety its people while endeavoring to limit the disruption from the COVID-19 pandemic on its business. The firm said it is closely working with its retail partners to meet consumer demand heading into the holiday season and noted that the company's supply chain is fully operational and poised to deliver in order to meet the extraordinary growth in consumer demand for its products.

The firm reported that in constant currency, Q3/20 net sales in the North America segment increased 13%, International sales increased 8% and the American Girl segment decreased by 1%. The company explained that "net and gross Sales declined primarily due to lower sales in proprietary retail channels, mostly offset by higher direct-to-consumer sales."

The company also provided a breakdown of worldwide revenue by product category which indicated that in Q3/20 gross sales for dolls increased by 22% to $690.5 million. The firm stated that the increase was primarily driven by growth in the Barbie line of products. Additionally, gross sales for infant, toddler, and preschool decreased 6% to $404.1, while gross sales for vehicles rose 6% to $369.4 million driven by sales of Hot Wheels products and action figures, building sets, games, and other sales increased 14% to $354.5 million.

Mattel is headquartered in El Segundo, Calif., and is a global toy company and owner of some of the best known toy and game brands and family entertainment franchises in the world. Its well-known portfolio of brands include American Girl®, Barbie®, Fisher-Price®, Hot Wheels®, MEGA®, Thomas & Friends™, UNO® and others.

Mattel started the day with a market capitalization of around $4.5 billion with approximately 347 million shares outstanding and a short interest of about 5.1%. MAT shares opened more than 7% higher today at $13.85 (+$0.93, +7.20%) over yesterday's $12.92 closing price and bumped up to just below its $14.83 52-week high price this morning. The stock has traded today between $13.80 and $14.82 per share and is currently trading at $14.34 (+$1.42, +10.99%).


1) Stephen Hytha compiled this article for Streetwise Reports LLC and provides services to Streetwise Reports as an independent contractor. He or members of his household own securities of the following companies mentioned in the article: None. He or members of his household are paid by the following companies mentioned in this article: None.
2) The following companies mentioned in this article are billboard sponsors of Streetwise Reports: None. Click here for important disclosures about sponsor fees.
3) Comments and opinions expressed are those of the specific experts and not of Streetwise Reports or its officers. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security.
4) The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports' terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports.
5) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the decision to publish an article until three business days after the publication of the article. The foregoing prohibition does not apply to articles that in substance only restate previously published company releases.

Want to read more about Special Situations investment ideas?
Get Our Streetwise Reports Newsletter Free and be the first to know!

A valid email address is required to subscribe