The Christmas shopping season produced the best year-end quarter for Mattel in more than a dozen years, after toy sales increased by double digits, overtaking the industry, CNBC CEO Ynon Kreiz told Jim Cramer of CNBC on Wednesday -market.
In its fourth quarter report released after Tuesday’s close, Mattel recorded $ 1.6 billion in sales, a 10% increase over the same quarter last year. It is the first time that the toy manufacturer’s sales have grown by double digits in a holiday quarter since 2006, when the number grew by more than 14%.
“This was an exceptional quarter for Mattel, with our best performance in years with strong consumer demand and another landmark year for the company,” said Kreiz in an “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 yielding results under Kreiz’s leadership. He pointed out that the company is also improving cash flow.
Mattel had its first year of growth since 2013, when revenues were a meager $ 6.5 billion. For the 2020 calendar year, Mattel reported $ 4.58 billion in revenue, almost 2% higher than in 2019, and $ 127 million in net revenue, the first profitable year for the company since 2016, according to FactSet . The results were better than analysts had predicted.
Barbie had the best growth of Mattel’s product lines, with sales growing 16% in the year.
“It’s not just about the quarter or the year,” said Kreiz, who became chief executive in the first half of 2018. “It’s about the multi-year strategy that’s going really well, which puts us in a strong position to continue to increase profitability and accelerate our growth in 2021 and beyond. “
This multi-year strategy includes a list of objectives, including restoring profitability and recovering frontline growth in the short to medium term, while capturing the full value of your intellectual property in the medium to long term.
The construction of an online retail and e-commerce strategy, together with the production of 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 more than 50 projects underway, some currently in production and many under development.
Projects include a live action movie from Uno, a game show Whac-A-Mole and a Thomas & Friends series, Kreiz said.
“This is part of our medium to long-term strategy,” said Kreiz. “These projects take time due to the scale and ambition, but we are well on our way to putting them into practice and, you know, successfully this can be transformative.”
Looking ahead, Mattel projects that sales will grow by half to one digit this year, preventing 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’s shares fell 2% on Wednesday to $ 18.47. In the year, the stock rose almost 6%.