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(Reuters) - Mattel missed market estimates for holiday-quarter sales and profit, and forecast tepid 2024 sales on Wednesday as soft demand for toys overshadows gains from its blockbuster movie "Barbie".
Still, the company forecast better-than-expected full-year profit on cooling costs, and announced a share buyback program of $1 billion, following $203 million of repurchases in 2023.
An uncertain economy has dampened purchases of pricier toys and games, which hurt crucial holiday-season sales for toy companies, despite a better-than-expected shopping appetite during the period.
"We expect 2024 to also be soft but better than 2023 as trends will continue to improve," CEO Ynon Kreiz told Reuters.
Riding on the "Barbie" success, Mattel has floated a live-action feature film based on its iconic American Girl dolls. It also launched seven new games in 2023 from across its portfolio, including the Hot Wheels brand.
Kreiz said the company is planning on releasing more digital games this year.
Mattel expects 2024 net sales to be in-line with $5.44 billion reported in 2023 — shy of market expectations of a rise of 1.4%.
COST CUTS PAY OFF
Mattel's inventory-trimming measures helped drive another quarter of gross margins gains, which were up 580 basis points, improving from a 280 basis points rise in the third quarter.
Gross billings, which reflect the company's total sales to retailers, rose 33% in the fouth quarter in North America, as shoppers snapped up Barbie dolls. This topped a 10% rise in gross billings in the segment a year earlier.
Net sales in the quarter rose 16% to $1.62 billion, but missed Street expectations of an 18.5% rise to $1.66 billion.
Excluding items, adjusted profit per share was 29 cents, up from 18 cents a year ago, compared with analysts' expectation of a profit of 31 cents.
For 2024, the company announced a new cost savings program focused on streamlining its supply chain, and forecast full-year 2024 adjusted earnings per share between $1.35 and $1.45, with the mid-point above LSEG estimate of $1.37.
(Reporting by Juveria Tabassum; Editing by Shinjini Ganguli)
