The holiday shopping season produced the best end-of-year quarter for Mattel in more than a dozen years after toy sales rose double-digit, surpassing the industry, CEO Ynon Kreiz told CNBC’s Jim Cramer Wednesday.
In its fourth-quarter report released after Tuesday’s close, Mattel posted sales of $ 1.6 billion, up 10% from the previous quarter. This is the first time that the toy manufacturer’s sales have doubled in a holiday quarter since 2006, when the figure rose by more than 14%.
“This has been an exceptional quarter for Mattel, with the best performance in recent years with strong consumer demand and another important year for the company,” Kreiz said in a Mad Money interview.
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 pointed out that the company is also improving its cash flows.
Mattel had its first year of growth since 2013, when revenue was just $ 6.5 billion. For the 2020 calendar year, Mattel reported revenue of $ 4.58 billion, nearly 2% higher than in 2019, and net income of $ 127 million, the first profitable year for the company in 2016, according to FactSet. The results were better than analysts predicted.
Barbie had the best growth of Mattel product lines, sales growing by 16% per year.
“It’s not just a quarter or a year,” said Kreiz, who became chief executive in the first half of 2018. “It’s a multi-year strategy that looks very good, which puts us in a strong position to continue to increase profitability and accelerate our growth in 2021 and beyond. “
This multi-annual strategy includes a list of objectives, including restoring profitability and regaining linear growth in the short to medium term, while capturing the full value of its intellectual property in the medium to long term.
Building an online retail and e-commerce strategy, along with producing films involving Mattel brands are part of the company’s long-term vision.
The company launched a film and television division in 2018 and has over 50 projects in the works, some currently in production and many in the development stage.
Projects include a live-action Uno movie, a Whac-A-Mole game show and a Thomas & Friends series, Kreiz said.
“This is part of our medium- and long-term strategy,” Kreiz said. “These projects take time, given their scale and ambition, but we are about to implement them and, you know, successfully this can be transformative.”
In the future, Mattel expects sales to grow by an average of one this year alone, except for the impact of 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 close of $ 18.47. So far, the stock has increased by almost 6%.