Toy Product Actions and Content Creator Mattel, Inc. (NYSE: MAT) the stock is a rare performance as the shares are up 20% year-to-date, reaching 52 Week Highs as benchmarks dive in the opposite direction. The iconic toymaker made a surprise profit in its first fiscal quarter of 2022 when analysts expected a loss on top of beating high-level estimates. The sentiment turned positive again after supply chain issues dampened expectations in the prior quarter. All of its factories are fully operational as it navigates its global supply chain and logistics brilliantly. In fact, the Company recorded its best results in the first quarter for net sales, operating profit and EBITDA. The turnaround is complete and the Company expects to make the most of its powerful entertainment IPs that include Barbie, Hot Wheels, and Fisher Price. The Company has extended its global license agreements with Disney (NYSE: DIS) and Universal. The company has many movies and entertainment projects, including Masters of the Universe, the Hot Wheels movie and its Barbie movie, as well as NFTs and mobile games. The Company also has a ESG approach reduce plastic packaging by 25% per product and incorporate 100% recycled bio-based plastic by 2030. Cautious investors looking for a bit of green in a sea of red may look for opportunistic declines in Mattel shares.
Publication of results for the first quarter of fiscal year 2022
On April 27, 2022, Mattel released its fiscal first quarter 2022 results for the quarter ending March 2022. The company reported earnings per share (EPS) of $0.08, beating analyst estimates for a loss of (-$0.04), by $0.12. Revenue rose 19.1% year-over-year (YoY) to $1.04 billion, beating analyst estimates of $0.92 billion. Mattel CEO Ynon Kreiz said, “After completing our turnaround in 2021, we are firmly in growth mode and operating as a high-performing, IP-driven toy company. Mattel’s supply chain plays a key role in our success. All of our factories are fully operational and we are working with our retail partners to ensure product is on the shelves to meet consumer demand. The outlook for the full year is solid, we expect to increase our market share and we reiterate our guidance for 2022 and our objectives for 2023.”
Indicative estimates reaffirmed
Mattel reaffirmed its full-year 2022 EPS guidance of $1.42-$1.48 from analyst consensus estimates of $1.45 on revenue growth of 8%-10% or 5.90 billion to $6 billion versus $5.83 billion according to analyst consensus estimates. The company reaffirmed full-year 2023 EPS above $1.90 versus analyst consensus estimate of $1.88 with high-single-digit net sales.
Takeaways from the conference call
CEO Kreiz pointed out that Mattel was the No. 1 toy company in the world in the leading, vehicle, doll, toddler and preschool categories. It underscored its small-cap approach by strategically investing in manufacturing capacity to improve operational efficiency while boosting productivity. He explained how the company leverages its intellectual property across multiple verticals, including physical toys, digital properties, and motion pictures. He detailed some of Mattel’s IP licensing agreements and partnerships. The company hired JJ Abram’s Bad Robot to produce its Hot Wheels movies. The Barbie movie is in principal photography in London with an all-star cast of Margot Robbie, Will Ferrell and Ryan Gosling. It’s slated for release on July 21, 2023. Its mobile games unit Mattel163 launched the Master of the Universe game on Roblox and sold new NFT sets for Barbie and Hot Wheels. The company is planning many more NFT launches in 2022.
MAT stock trajectories
Using rifle paintings on a weekly and daily timescale provides an accurate view of the landscape for the stock MAT. The weekly Rifles chart hit its latest low near $21.69 Fibonacci level (fib). Stocks soared on earnings release to trigger breakout on weekly weak market structure (MSL) buy trigger above $23.76. The weekly 5-period moving average (MA) support begins to rise at $23.47, followed by the 15-period MA at $23.32. The weekly upper Bollinger Bands (BB) touched $26.94. The weekly stochastic crossed on a mini reverse pup attempt as it wraps around the 60 band. The weekly 50-period MA is rising near the $21.69 fib. The daily uptrend of the Rifles chart rises to $26.06, followed by the 15-period MA at $24.04. The daily upper BB stands at $19.43 as the Stochastic Mini PUP crosses the 90 band. The daily 50-period MA support is at $23.50 and the daily 200-period MA is at $21.88. Cautious investors can watch for opportunistic pullback levels at the $24.74 fib level, $23.76 weekly MSL, $22.59 fib, $21.69 fib, $21.05 fib, $20.29, 19 $.01 fib and $18.15 fib. The upward trajectories are from the $30.57 fib to the $35.60 price level.