Barbie, Hot Wheels drive Mattel’s sales beat; shares soar

Barbie dolls are seen inside the new flagship FAO Schwarz store in Rockefeller Plaza in New York, US, November 16, 2018. (Reuters pic)

BENGALURU: Mattel beat Wall Street estimates for quarterly sales on Thursday, as the toy-maker sold more Barbie dolls and Hot Wheels cars during the crucial holiday season, sending its shares up more than 17% in extended trading.

Gross sales rose 12% for Barbie and 9% for Hot Wheels in the fourth quarter, handily beating analysts’ estimates for both brands.

However, gross sales in North America fell 10.1% to US$744.5 million, reflecting Mattel’s struggles with finding a major retailer to make up for lost sales from the shuttering of Toys ‘R’ Us.

Analysts had expected North American gross sales of US$829.6 million, according to four analysts polled by Refinitiv.

Overall, Mattel’s net revenue fell 5.4% to US$1.52 billion, but was still above analysts’ estimates of US$1.44 billion.

Mattel reported net income of US$14.9 million, or 4 cents per share, in the fourth quarter ended Dec 31, compared with a loss of US$281.3 million, or 82 cents per share, a year earlier, when it took a one-time charge related to changes in US tax laws.

Costs fell 27% to US$814.7 million as the company benefited from its plans to streamline its operations.

Mattel has been aiming to cut at least US$650 million in net costs by the end of 2019 through job cuts and other measures such as looking at options for its manufacturing facilities.