Quarterly reports from Mattel Inc and Hasbro Inc show that while the demise of Toys “R” Us has shaken up the industry, the two dominant toymakers’ paths are diverging less than a year later.
Late on Thursday, Mattel posted better-than-expected earnings per share and revenue for the key holiday quarter, sending its shares up sharply.
The maker of Barbies and Hot Wheels in April last year named a new chief executive officer and has launched a restructuring that is starting to take hold, analysts said.
For the three months that ended in December last year, Mattel swung to a profit of US$14.9 million, or US$0.04 per share, after posting a loss a year earlier.
Revenue of US$1.52 billion was down 5 percent year over year, but topped estimates.
The loss of Toys “R” Us — which liquidated its stores in the spring last year — lead to an 8 percent drop in sales, while a slowdown in China contributed to a 2 percent headwind.
Still, El Segundo, California-based Mattel reported that it achieved US$521 million in savings during the fourth quarter and expects to exceed its savings target of at least US$650 million this year.
Under its restructuring program, it is cutting 2,200 jobs worldwide, mainly office workers.
“While it’s still early days of the turnaround and there are areas to improve (Fisher Price, American Girl, etc.), we’re encouraged by the early signs of progress and think delivering above-plan cost savings should help as we enter 2019,” Citi analyst Gregory Badishkanian wrote in a note to investors.
Its stock rallied 21 percent in afternoon trading on Friday to US$15. That puts it up 50 percent in the year to date.
While Hasbro also returned to a profit in the fourth quarter, the Pawtucket, Rhode Island-based maker of Nerf and Power Rangers again missed Wall Street expectations for sales and net income, following a shortfall in the third quarter of last year.
The company earned US$8.8 million, or US$0.07 per share, for the period that ended on Dec. 30.
A year earlier it lost US$5.3 million, or US$0.04 per share. Stripping out one-time gains and costs, earnings were US$1.33 per share.
That is sharply below the US$1.68 per share that analysts polled by Zacks Investment Research expected.
Revenue dropped 13 percent to US$1.39 billion, short of the US$1.52 billion Wall Street predicted.
Hasbro was not able to recapture as much of the Toys “R” Us business during the holidays as it expected, chairman and chief executive officer Brian Goldner said in a statement.
The company was also contending with changing consumer behaviors in Europe — sales there declined 22 percent — and reduced retail inventory, he added.
Its shares slid 4.5 percent to US$86.22.
Stifel analyst Drew Crum, who has a “hold” rating on the stock, called the report “disappointing.”
“While we continue to expect growth this year, we believe downward revisions to numbers are forthcoming,” he wrote in a note.
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
Malaysia’s leader yesterday announced plans to build a massive semiconductor design park, aiming to boost the Southeast Asian nation’s role in the global chip industry. A prominent player in the semiconductor industry for decades, Malaysia accounts for an estimated 13 percent of global back-end manufacturing, according to German tech giant Bosch. Now it wants to go beyond production and emerge as a chip design powerhouse too, Malaysian Prime Minister Anwar Ibrahim said. “I am pleased to announce the largest IC (integrated circuit) Design Park in Southeast Asia, that will house world-class anchor tenants and collaborate with global companies such as Arm [Holdings PLC],”
Sales in the retail, and food and beverage sectors last month continued to rise, increasing 0.7 percent and 13.6 percent respectively from a year earlier, setting record highs for the month of March, the Ministry of Economic Affairs said yesterday. Sales in the wholesale sector also grew last month by 4.6 annually, mainly due to the business opportunities for emerging applications related to artificial intelligence (AI) and high-performance computing technologies, the ministry said in a report. The ministry forecast that retail, and food and beverage sales this month would retain their growth momentum as the former would benefit from Tomb Sweeping Day
Thousands of parents in Singapore are furious after a Cordlife Group Ltd (康盛人生集團), a major operator of cord blood banks in Asia, irreparably damaged their children’s samples through improper handling, with some now pursuing legal action. The ongoing case, one of the worst to hit the largely untested industry, has renewed concerns over companies marketing themselves to anxious parents with mostly unproven assurances. This has implications across the region, given Cordlife’s operations in Hong Kong, Macau, Indonesia, the Philippines and India. The parents paid for years to have their infants’ cord blood stored, with the understanding that the stem cells they contained