Mattel has put paid to a five-year period of decline, finishing 2019 with net sales up 1 per cent in constant currency, and flat including negative foreign exchange.
A shaky Q4 saw net sales drop 3 per cent compared with the same period in 2018. The Christmas period was hit by a further 20 per cent decline in sales of the company’s American Girl doll brand, and a downturn in Fisher-Price. Mattel’s infant lines fell 11 per cent for the full year, driven by declines in Fisher-Price and Thomas and Friends.
This was partially offset by growth in Mattel’s action figures and vehicles segments, with Hot Wheels showing healthy growth against drop in licenses such as Cars and Jurassic World. Games and building sets also proved popular at Christmas, with brands like Toy story 4 and Uno lessening the impact of declines from licenses in non-movie years. The three segments collectively grew 14 per cent for a gain of $982m.
Chairman and CEO Ynon Kreiz said the year’s performance was “an important inflection point” for the company.
“We are very encouraged by the consistent progress the company is making and expect to continue to build on this momentum,” Ynon adds. “We remain focused on the execution of our multi-year turnaround strategy to transform Mattel into an IP-driven, high-performing toy company and create long term shareholder value.”
Joseph Euteneuer, Mattel’s outbound CFO, who announced his departure last year, says a “methodical execution” in strategy had “generated significant improvements” in margins, operating income and cash flow.
Reported operating income was $39.2m, an improvement of $273.6m, while adjusted operating income was $156.2m, an improvement of $269.3m.
Stock prices took a minor tumble before finishing the day 5 per cent up in after-hours trading.