The holiday shopping season produced the best year-end quarter for Mattel in more than a dozen years after toy sales rose in double digits, surpassing the industry, Jim Cramer said Wednesday. CNBC CEO Jim CNR.
In its fourth-quarter report released after Tuesday’s close, Mattel posted $ 1.6 billion in sales, 10% more than the previous year’s quarter. It is the first time the toy maker’s sales have grown double-digit in a holiday quarter since 2006, when the figure rose more than 14%.
“This was an exceptional quarter for Mattel with our best performance in years with strong consumer demand and another milestone year for the company,” Kreiz said in an interview with Mad Money.
The performance, which followed double-digit growth in the third quarter, is a sign that the company’s multi-year recovery plan is yielding results under Kreiz’s leadership. He stressed that the company is also improving cash flows.
Mattel had its first year of growth since 2013, when revenue was as low as $ 6.5 billion. For the 2020 calendar year, Mattel reported $ 4.58 million in revenue, nearly 2% more than in 2019 and $ 127 million in net revenue, the first profitable year for the company since 2016, according to FactSet. The results were better than analysts predicted.
Barbie had the best growth of Mattel’s product lines, with sales up 16% year-on-year.
“It’s not just about the quarter or the year,” said Kreiz, who became chief executive in the first half of 2018. “It’s the multi-year strategy he’s been following very well, which puts us in a strong position to continue to increase profitability and accelerate our growth in 2021 and beyond. “
This multi-year strategy includes a list of objectives, including the recovery of profitability and the recovery of global growth in the short-medium term, capturing the full value of its intellectual property in the medium to long term.
Creating an e-commerce and online retail strategy, along with producing Mattel-branded films, are part of the company’s long-term vision.
The company launched a film and television division in 2018 and has more than 50 ongoing projects, with some currently in production and many under development.
Projects include a live-action One movie, a Whac-A-Mole game, and a Thomas & Friends series, Kreiz said.
“That’s part of our medium- and long-term strategy,” Kreiz said. “These projects take time given their scale and ambition, but we are well on our way to putting them into practice and, as you know, in success this can be transformative.”
Looking to the future, Mattel expects sales to grow from mid-to-high this year, except for the impact of the coronavirus and other economic uncertainties. The company plans to invest between $ 125 million and $ 150 million in investments and other priorities.
Despite the strong quarterly report, Mattel shares fell 2% on Wednesday to close at $ 18.47. So far, shares have risen about 6%.