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Wednesday, Jun 29, 2022

Mattel, Skechers Cite Strong Q1 Numbers

Buzz about a potential buyout and stellar quarterly results helped propel Mattel Inc.’s share price above $24 last week, for a market value of $8.63 billion.
The El Segundo-based toymaker posted its highest net sales and operating income in company’s history for a first quarter, according to Chief Executive Ynon Kreiz, who attributed the strong performance to Mattel’s well-functioning supply chain.

“All of our factories are fully operational, and we are working with our retail partners to ensure product is available on shelves to meet consumer demand,” Kreiz said in a statement. “The full-year outlook is strong, we expect to grow market share, and we are reiterating our 2022 guidance and 2023 goals.”

For the first quarter of 2022, Mattel posted net sales of $1.04 billion, a 19% increase compared to same period last year. Net sales in the North America increased 26%, while the revenue from international markets was up 16% year-over-year.
Net income for the quarter added up to $21 million or 6 cents per share, compared to a net loss of $112 million in the first quarter of 2021. Analysts anticipated a loss of 4 cents per share on $918 million in revenue.

The better-than-expected results come as the Wall Street Journal reported that Mattel is in early stage talks with Apollo Global Management Inc. and L Catterton about a potential buyout. The company did not address the deal during an earnings conference call on April 27. The toy manufacturer has 36,300 employees, 88% of which work outside of U.S. Last year it reported $903 million in net income on $5.45 billion in revenue.

Skechers U.S.A. Inc. was another local retailer reporting record revenue increase in quarterly sales. The Manhattan Beach-based apparel and footwear company posted $1.82 billion in net revenue, a 26.8% increase compared to the first quarter of 20221. Its earnings grew 22.6% to $121.2 million or 77 cents per share. Wall Street analysts anticipated income of 75 cents per share on $1.74 billion in net revenue.

“The sales achievement was driven by increases of 33% in our wholesale and 16% in our direct-to-consumer segments,” Chief Operating Officer David Weinberg said in a statement. “By region, the growth was the result of increases of 31% in the Americas, driven by double-digit growth in the United States; 49% in EMEA (Europe, Middle East and Africa), driven by strong growth across Europe; and 4% in APAC (Asia-Pacific), led by 9% growth in China. Several key APAC markets faced increasing Covid-related restrictions as the quarter evolved including China. Despite the ongoing pandemic and other macroeconomic headwinds, we are especially encouraged by the phenomenal growth we experienced. We believe this momentum will continue as we strive towards our goal of $10 billion (in revenue) by 2026.”

Skechers’ guidance for the second quarter counts on sales between $1.75 billion and $1.80 billion and diluted earnings per share of between 50 and 55 cents. For the full fiscal year 2022, the company anticipates sales between $7.2 billion and $7.4 billion and net earnings ranging from $2.75 to $2.95 per share.

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