During the second quarter, cost inflation hurt the company’s operations due to a rise in raw materials prices. Moreover, high costs are hurting the company’s performance. The coronavirus pandemic and other macroeconomic uncertainties might negatively impact the company’s performance in the days ahead. In China, the company’s sales were affected by COVID-related retail closures during the second quarter of 2022. Supply chain disruptions due to the pandemic affected the company. Mattel’s second-quarter performance was negatively impacted by the coronavirus pandemic.
For 2023, the company expects the adjusted EPS to be greater than $1.90. Adjusted operating income margin for 2023 is expected between 16% and 17% of net sales. For 2023, the company anticipates net sales to grow in the high-single digits on a constant currency basis. Adjusted EBITDA for 2022 is expected to be $1,100-$1,125 million, suggesting an increase from the $1,007 million reported in 2021. Adjusted gross margin for 2022 is expected at 47-48%. Net sales in the North America segment rose 30% year over year on a reported and cc basis.įor 2022, the company anticipates net sales to grow in the range of 8-10% at cc. This can be attributed to an increase in sales of Action Figures, Building Sets, Games, and Other (including Jurassic World and Lightyear), Vehicles (including Hot Wheels), Infant, Toddler, and Preschool (including Fisher-Price and Thomas & Friends) and Dolls (including Polly Pocket and Barbie). During the second quarter, gross billings in North America surged 30% (as reported and at constant currency) year over year. On the other hand, this Zacks Rank #3 (Hold) company is benefiting from robust North American sales. The company has been witnessing an improving sales trend for Hot Wheels and is quite confident about the brand’s long-term prospects. During the first and second quarters of 2022, gross billings at the Hot Wheels brand rose 31% and 26% (on a reported basis) and 36% and 31% (at cc) year over year, respectively. The company witnessed strong Hot Wheels sales in 2021. It marked the seventh consecutive year of POS growth globally and in the United States. In 2020, worldwide gross sales at the Hot Wheels brand increased 3% on a reported basis and 5% at constant currency. In 2018, worldwide gross sales for Hot Wheels were up 9% and reached the highest annual sales in its 50-year history. During the second quarter of 2021, the company gave the green signal to a new Barbie feature film and announced the commencement of production in 2022 with a targeted release in 2023. Meanwhile, the company plans to develop Barbie Fashion Battle, a reality show where designers compete for the chance to create a fashion collection for Barbie. Per NPD, Barbie strengthened its position as the number one Global Doll brand in 2021 for the second consecutive year. In the second quarter, the Barbie brand’s worldwide gross billings witnessed an improvement of 3% on a reported basis and 7% at cc. The Barbie brand continues to instill investor confidence with solid performance.
However, the coronavirus pandemic and high costs remain concerns for the company. Consequently, in the past year, the company’s shares have gained 13.5% against the industry’s decline of 6.2%.
The company continues to benefit from robust gross billings in North America. MAT is well-posed to benefit, courtesy of robust Barbie brand and Hot Wheels sales.
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