Mattel Inc. MAT-Q reported a higher-than-expected quarterly profit on lower costs, even as a stronger dollar hurt the world’s largest toy company’s revenue in the period covering the Christmas selling season.
The news came just weeks after smaller rival Hasbro Inc. forecast weak sales for the fourth quarter, citing weak post-Thanksgiving demand in the United States and Canada. The company is due to report results on Feb. 6.
International sales have been much higher for both Mattel and Hasbro, analysts have said. A stronger dollar, however, brings down the value of exported goods by U.S. companies.
Mattel, which derives roughly half its business from international markets, said fourth-quarter net sales rose 1 per cent to $2.15-billion. Analysts on average expected $2.22-billion, according to Thomson Reuters I/B/E/S.
The maker of Barbie dolls, Hot Wheels cars and Fisher-Price toys said net income rose to $370.6-million, or $1.07 a share, from $325.2-million, or 89 cents a share, a year earlier.
Analysts were looking for a profit of $1.01 a share.
Despite the sales miss, Mattel clearly exhibited a much better performance than its rival in the holiday season and even gained share from Hasbro, NPD data showed.
“U.S. retail category trends remain most favourable for Mattel,” Wells Fargo analyst Tim Conder has said, stressing that demand was strong for its Barbie dolls, Monster High dolls, WWE action figures, Hot Wheels cars, and Thomas & Friends toys even as its Fisher-Price business continued to struggle.
On Tuesday, Mattel also set a first-quarter cash dividend of 31 cents a share, reflecting an annual payout of $1.24. That represents a 35-per-cent increase from last year.
