FILE PHOTO – Barbie dolls are seen inside the new flagship FAO Schwarz store in Rockefeller Plaza in New York, U.S., November 16, 2018. REUTERS/Shannon Stapleton
(Reuters) – Mattel Inc beat Wall Street estimates for quarterly sales on Thursday, as the toy-maker sold more Barbie dolls and Hot Wheels cars during the crucial holiday season, sending its shares up more than 17 percent in extended trading.
Barbie ended the year with its highest gross sales in five years, Mattel said. The company has been successful in turning around the iconic brand by launching dolls with different skin tones, adding plus-sized and hijab-wearing models and introducing new science kits to make the dolls more educational.
Gross sales rose 12 percent for Barbie and 9 percent for Hot Wheels in the fourth quarter, handily beating analysts’ estimates for both brands.
However, gross sales in North America fell 10.1 percent to $744.5 million, reflecting Mattel’s struggles with finding a major retailer to make up for lost sales from the shuttering of Toys ‘R’ Us.
Analysts had expected North American gross sales of $829.6 million, according to four analysts polled by Refinitiv.
Overall, Mattel’s net revenue fell 5.4 percent to $1.52 billion, but was still above analysts’ estimates of $1.44 billion.
Mattel reported net income of $14.9 million, or 4 cents per share, in the fourth quarter ended Dec. 31, compared with a loss of $281.3 million, or 82 cents per share, a year earlier, when it took a one-time charge related to changes in U.S. tax laws.
Costs fell 27 percent to $814.7 million as the company benefited from its plans to streamline its operations.
Mattel has been aiming to cut at least $650 million in net costs by the end of 2019 through job cuts and other measures such as looking at options for its manufacturing facilities.
Reporting by Uday Sampath in Bengaluru; Editing by Anil D’Silva