The Christmas shopping season provided the best year-end quarter for Mattel in more than a dozen years after toy sales surged by double digits and outpaced the industry, CEO Ynon Kreiz told CNBC’s Jim Cramer on Wednesday.
In the fourth quarter report released after Tuesday’s close, Mattel posted $ 1.6 billion in sales, up 10% from the same quarter a year ago. It marks the first time that the toy manufacturer’s sales have grown double-digit in a holiday quarter since 2006, when the figure rose by more than 14%.
“This was an exceptional quarter for Mattel with our best performance in years of strong consumer demand and another milestone year for the company,” Kreiz said in a “Mad Money” interview.
The performance, which followed double-digit growth in the third quarter, is a sign that the company’s multi-year recovery plan is delivering results led by Kreiz. He stressed that the company is also improving cash flows.
Mattel had its first year of growth since 2013, when revenues were worth just under $ 6.5 billion. For calendar year 2020, Mattel reported $ 4.58 billion in revenues, nearly 2% higher than in 2019, and $ 127 million in net profit, the company’s first profitable year since 2016, according to FactSet. The results were better than what analysts had predicted.
Barbie had the best growth of Mattel’s product lines, with sales up 16% year over year.
“This is not just about the quarter or the year,” said Kreiz, who became CEO in the first half of 2018. “It’s about the multi-year strategy that follows very well, which puts us in a strong position to continue. To increase profitability and accelerate our growth in 2021 and beyond.”
That multi-year strategy includes a list of objectives, including restoring profitability and regaining revenue growth in the short to medium term, while leveraging the full value of its intellectual property in the medium to long term.
Developing an online retail and e-commerce strategy, along with producing movies with Mattel brands, are part of the company’s long-term vision.
The company launched a film and television division in 2018 and has more than 50 projects in the works, some of which are currently in production and many in the development phase.
Projects include an Uno live-action movie, a Whac-A-Mole game show and a Thomas & Friends series, Kreiz said.
“This is part of our medium to long-term strategy,” said Kreiz. “These projects take time, given their scale and ambition, but we are well on the way to setting them up and, you know, if successful, this can be transformative.”
Looking ahead, Mattel expects sales to grow by average to single digits this year, barring the impact of the coronavirus and other economic uncertainties. The company plans to spend between $ 125 million and $ 150 million on investments and other priorities.
Despite the strong quarterly report, Mattel shares fell 2% on Wednesday to a closing price of $ 18.47. Since the beginning of the year, the stock is up nearly 6%.