Barbie parent company Mattel (MAT) was in the pink on Wednesday as it delivered an upbeat profit forecast and pointed to better toy demand in 2025 and the impact of film franchises.
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Shares of the Hot Wheels maker raced higher as it also downplayed the impact of trade wars and said it would raise prices to counter any negative effect from tariffs on imports from China, Mexico and Canada.
MAT rallied 16% in early trade Wednesday after it projected net sales growth of 2-3% in constant currency for 2025, with adjusted earnings per share forecast to grow 2-6%, which includes the anticipated impact of tariffs.
“We believe we are well positioned to outpace the industry and gain market share in 2025,” said CFO Anthony De SIlvestro on the earnings call with analysts.
Hot Wheels Drives Sales
Although there was still some pressure on Barbie sales after some tough comparisons from the prior year due to the timing of the Barbie film release in summer 2023, demand for the Hot Wheels vehicles helped its Fiscal fourth quarter results to exceed expectations, with net sales up 2%.
Full year net sales declined 1% but operating income rose to $694 million, an improvement of $133 million on the prior year as gross margins expanded by 330 basis points. Full-year adjusted EPS for 2024 of $1.62 compared to $1.23 per share a year ago.
From Barbie to Snow White and Wicked
MAT CEO Ynon Kreis talked up the positive momentum from entertainment partnerships.
The company is launching a product tied to the theatrical releases of Snow White with Disney (DIS) as well as the second Wicked movie. “And in action figures, we’re going to bring out two big movies, Jurassic World and Minecraft,” Kreis added.
On Wall Street, analysts cheered the results. Jefferies upgraded the stock to Buy, citing those forthcoming movie releases. Meanwhile three further analysts raised their price targets on the stock.
Is MAT a Good Stock to Buy?
Overall, Wall Street has a Moderate Buy consensus rating on MAT stock, based on three Buys and three Holds. The average MAT price target of $24.50 implies around 16% upside after today’s big jump, though ratings are likely to change after the earnings release.
