The stock price of Mattel, Inc. (NASDAQ:MAT) plunged nearly 7% to $36.35 per share at the time of this writing, around 11:12 A.M in New York after the world’s largest toy manufacturer posted disappointing second-quarter financial results.
Second-quarter financial results
Mattel, Inc. (NASDAQ:MAT) reported earnings of $28.3 million or $0.08 per share. During the same period a year ago, its earnings were $73.3 million or $0.21 per share in the same period a yea
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According to the Barbie maker, its worldwide net sales declined 9% to $1.06 billion from $1.17 billion last year. Its sales in North America and International region dropped 8% and 9%, respectively.
Mattel, Inc. (NASDAQ:MAT) said the worldwide gross sales of its core brands including Barbie plummeted 15%, and Fisher-Price dropped 17%, and Hot Wheels declined 2%. The Mattel Boys and Girls Brands also fell 13% while the American Girl Brands went up 6%.
During the quarter, the gross margin of Mattel, Inc. (NASDAQ:MAT) dropped 490-basis points of its net sales. Its SG&A increase 340-basis points of net sales including the impact of the MEGA Brands acquisition.
Dividend and stock buyback
The board of directors of Mattel, Inc. (NASDAQ:MAT) approved a cash dividend of $0.38 per share for the third quarter.
The toy manufacturer repurchased 2.6 million of its common stock worth approximately $100 million during the second quarter.
CEO believes Mattel will be in a better position going forward
Bryan G. Stockton, the chairman and CEO of Mattel, Inc. (NASDAQ:MAT) said they “made significant progress across a number of initiatives” during the second quarter, and he is confident that the company will be in a better position for the remainder of the year and beyond.
According to him, Mattel, Inc. (NASDAQ:MAT) completed the acquisition of MEGA Brands for $423 million, reduced its inventories and strengthened its management team. The company also shifted its marketing costs and exercised strong controls on SG&A expenses.
Stockton further said, “While results for the quarter did not meet our expectations, we did see improving POS trends. As we move into the second half of the year and the all-important holiday season, we need to drive POS higher by bringing innovative products to market, making additional advertising investments and optimizing the effectiveness of our marketing spend.”