Some good news for Mattel….
The company reported Q3 net sales of $1.44 billion as North American sales increased by four per cent and gross sales increased by six per cent which Mattel says is the highest sales growth in North America since Q4 2015.
And positively, they are reporting that they are back on top as number one toy company globally in each of the last four months through to September, according to NPD.
Ynon Kreiz, Chairman and CEO of Mattel, said: “We are on track with the execution of our strategy and have made meaningful progress towards restoring profitability, as we transform Mattel into an IP-driven, high-performing toy company. In the quarter, we achieved Operating Income of $122 million, up 41% versus the same period last year, which is the first time in eight quarters that we have posted year-over-year growth.”
“We are proud to say that we recaptured our position as the number one toy company globally in each of the last four months through September, according to NPD. We were also the number one toy company in the U.S. and Latin America year-to-date through September. We continued to make progress in reshaping our organization and are actively exploring strategic alternatives for our manufacturing footprint as we move toward a capital-light model. Additionally, we have taken meaningful steps to drive future growth and capitalize on our iconic brands and IP. This includes the creation of a new theatrical film division and a global franchise management organization.”
Joseph Euteneuer, CFO of Mattel, added: “We continue to be on-track to achieve or exceed our $650 million targeted run-rate cost savings exiting 2019 and are clearly seeing the benefits of Structural Simplification materializing in the P&L. The actions taken through the third quarter resulted in approximately $120 million of savings and we expect to deliver annual run-rate savings of over $500 million exiting 2018. We remain focused on value creation for our shareholders through our comprehensive actions to restore profitability and regain topline growth.”
For the third quarter of 2018, Net Sales were down 8% as reported and 6% in constant currency, versus the prior year’s third quarter. Gross Sales were down 6% as reported and 4% in constant currency, reflecting a negative 3% impact from the Toys “R” Us™ liquidation and a negative 3% impact from the slowdown in our China business. Reported Operating Income was $122 million up 41%, and Adjusted Operating Income was $153 million up 31%. Reported Earnings Per Share was $0.02 and Adjusted Earnings Per Share was $0.18.
Net Sales in the North America segment increased by 4% as reported, versus the prior year’s third quarter. Gross Sales in the North America segment increased by 6% as reported, primarily driven by strong sales of Barbie, despite a 4% impact from Toys “R” Us.
However, in the International segment, Net Sales decreased by 18% as reported and 14% in constant currency, versus the prior year’s third quarter. Gross Sales in the International segment decreased by 16% as reported and 11% in constant currency, primarily driven by lower sales of Fisher-Price™ and Thomas & Friends™ and CARS™, partially offset by initial sales of Jurassic World™. By region, the decrease in Gross Sales as reported was driven by lower sales in Global Emerging Markets, predominantly in China, and Europe.