Recall Has Little Effect on Mattel, So Far

0

Despite a recall that included more than 20 million toys, the effect on Mattel Inc.’s ratings or outlook has been minimal, according to a Standard & Poor’s Ratings Services report that was released Thursday.


“Because we are uncertain about the risks surrounding the recall, we are more likely to move the timing of an upgrade further out,” S & P; said. “We could, however, revise the outlook to stable if negative publicity on the recalls stalls Mattel’s recent progress in operating performance; the company announces further significant recalls; product liability issues surface; or if the company reacts to the pressure of recent news on its share price by boosting share repurchases.”


The agency also added that it continues to monitor the situation.


The toymaker recently reported a 15 percent hike in profit along with a 6 percent gain in sales, helped mainly by strong worldwide sales of Barbie dolls as well as Hot Wheels and Matchbox cars, the company said a month ago. After reporting its earnings, shares soared 11 percent.


Shares in Mattel have traded between $22 and $29 so far this year, but the price now is about where it was at the beginning of the year. Shares were down 38 cents, or 1.7 percent, to $22.17 in afternoon trading Thursday on the New York Stock Exchange.

No posts to display