BENGALURU (REUTERS) – Mattel forecast full-year profit above estimates on Wednesday (Feb 9), with the company confident robust demand for its Barbie dolls and other toys will help the toymaker weather rampant supply chain disruptions.
Shares of the company surged about 10 per cent in extended trading after it topped Wall Street estimates for holiday-quarter results.
Demand for toys has soared to a record high over the last year with homebound parents looking to keep their children entertained indoors during the pandemic, helping toymakers raise prices to counter higher costs without fear of much consumer pushback.
Even as supply chain bottlenecks and surging raw material costs show no signs of easing, Mattel chief executive Ynon Kreiz told Reuters he was confident the company had enough options to navigate the issues, including potentially raising prices further.
"We are not necessarily expecting supply chain disruptions to go away, but we do expect to be able to navigate further disruption if it comes," he said.
Earlier this week, rival Hasbro warned of a hit to its profit margins this year, due to surging supply costs.
Mattel expects adjusted 2022 profit of US$1.42 to US$1.48 per share, above estimates of US$1.39 per share, according to Refinitiv IBES. It forecast net sales to rise between 8 per cent and 10 per cent on a constant currency basis.
Still, "while Mattel has great momentum with its brands, there is going to be a tremendous headwind from a macro perspective", BMO analyst Gerrick Johnson noted, citing inflationary pressures and the lapping of stimulus benefits from last year.
Mattel's revenue jumped 10 per cent to about US$1.80 billion in the fourth quarter of last year, beating analysts' estimates of US$1.66 billion.
Excluding items, it earned 53 cents per share, trouncing estimates of 30 cents.
The toymaker also lifted its 2023 net sales growth forecast to high single digits from a previous outlook of mid-single-digit growth.