Mattel (NASDAQ:MAT) is a California-based toy company. Its portfolio includes immensely popular brands like Barbie, Hot Wheels, and Fisher-Price. Shares have climbed 38.3% in 2019 as of close on February 19.
The stock is still down 16% year over year.
The company released its fourth-quarter and full-year results for 2018 on February 7. Barbie gross sales rose 12% in the quarter and climbed 15% in constant currency. Gross sales for Hot Wheels increased 9% and 12% in constant currency, reaching the brand’s highest gross sales in its history. Mattel reported earnings per share of $0.04 in Q4 2018 compared to a loss per share of $0.82 in the prior year.
The company is still facing challenges when it comes to declining sales in North America, but Mattel has been able to institute reforms to mitigate this. Mattel achieved $521 million of run-rate cost savings at the end of 2018.
It expects to exceed cumulative $650 million run-rate cost savings at the end of 2019. This strategy has vaulted the company back into profitability in Q4 2018, but can it last?
Retail sales in the United States recorded the biggest drop since September 2009 this past December. US retail sales fell 1.2% in December 2018 compared to a 2.3% increase in activity in December 2017.
This drop suggests a weakening in consumer spending in the fourth quarter.
Mattel stock has fallen over 10% since its post-earnings bump, which suggests that traders are skeptical about its prospects in 2019. Investors should look to other sectors as economic headwinds build up in the developed world.
