Mattel Halted After Plunging 15% As Company Unexpectedly Slashes Guidance
by Tyler Durden
ZeroHedge.com
Fri, 02/15/2019
The Toys’R’Us liquidation continues to reverberate within the supply chain, and moments ago it crushed the stock of toy maker Mattel, which plunged as much as 15% forcing a trading halt, after the company slashed guidance, expecting sales growth to be flat, and announcing during its analyst day that it is now targeting 2019 EBITDA of only $350m-$400m, sharply lower than consensus estimates of $512 million.
What is peculiar is that Mattel soared just last week, when it reported results that beat estimates on both the top and bottom lines as strong sales and cost savings of $521 million last year helped it generate its second consecutive quarter of profitability. In fact, in many ways, Mattel produced its best quarter since 2009. Investors cheered the results, sending the stock up more than 20% on Friday.
Notably, on last week’s earnings call, Mattel CEO Ynon Kreiz pointed out that the Fisher-Price segment was the “most heavily impacted” by the closing of Toys R Us. He was optimistic, saying, “The infant, toddler and preschool category is the single largest category in the toy industry and … we have been and remain the number one in the category globally and we believe if we are successful in our Fisher-Price turnaround plan there is significant upside potential to be captured.”
And yet, oddly Mattel did not provide a forecast for the current quarter or full year. On the conference call, CFO Joe Euteneur said the company would provide insight into the coming year at today’s Toy Fair.
And now, exactly one week later, Mattel decided to serve an unexpected surprise that threatens to undo much of the gains in the past week. The plunge in Mattel also dragged peer Hasbro as much as 6.9%
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