By Uday Sampath Kumar and Deborah Mary Sophia
(Reuters) – Mattel Inc beat Wall Street estimates for quarterly sales on Wednesday, extending a strong run since the pandemic, as retailers restocked the toymaker’s Barbie and Hot Wheels brands following inventory shortfalls over the holiday season.
Shipping delays, factory shutdowns and related supply chain snarls had delayed the arrival of many products during the all-important holiday shopping season, despite companies’ efforts to pull forward deliveries and reroute goods.
“Following such a strong holiday period, retailers were out of stock, so they restocked more for the first quarter, and still expect to grow in second quarter,” Chief Executive Ynon Kreiz told Reuters.
Shares of the California-based toymaker surged as much as 13.4% on Wednesday, following reports of buyout interest from firms including Apollo Global Management Inc and L Catterton.
The second quarter has started strong, Kreiz added, with demand boosted by action figures and games based on major upcoming movies including “Jurassic World: Dominion”, “Lightyear” and “Minions: The Rise of Gru”.
However, the company’s gross margin declined 70 basis points from a year earlier, as price hikes failed to cushion the blow from soaring input costs and transportation expenses.
Still, the Uno cards maker reported a net income of $21.5 million, or 6 cents per share, compared to a net loss of $112.4 million, or 32 cents per share, a year earlier.
Overall gross billings for Barbie, Mattel’s biggest brand, rose 8% in the quarter, while they jumped 31% at Hot Wheels.
Even in a seasonally slow first quarter, net sales surged 19% to $1.04 billion, trouncing analysts’ average estimate of $918 million, according to Refinitiv IBES.
(Reporting by Deborah Sophia in Bengaluru; Editing by Sriraj Kalluvila)
