Barbie dolls for sale at a Target store.
Scott Mlyn | CNBC
Mattel turned in mixed fourth-quarter results after holiday revenue was weighed down by continuing sales declines in its American Girl and Fisher-Price brands.
The company’s stock initially dropped, but now was up about 5% in extended trading, after posting the results.
Sales during the holiday quarter slumped 3%, once again feeling the strain from poor sales of American Girl dolls and Fisher-Price toys.
Sales in the American Girl segment dropped 20% in the fourth quarter, pulling down the entire doll category 6% despite the growth of the Barbie brand.
Declines in Fisher-Price Friends, Fisher-Price and Thomas & Friends brought the infant, toddler and preschool segment down 9%.
Still, the weak sales in these segments seem to have been overshadowed by the company’s stronger-than-expected earnings and the fact that Mattel exceeded its initial 2019 cost-cutting target of $650 millon by 35%, or $225 million.
Mattel posted a slight profit in the fourth quarter, and broke even on a per-share basis, down from earnings of $9.6 million, or 3 cents a share, in the year-ago period.
Excluding one-time items, the company earned 11 cents a share. Analysts had forecast earnings of 1 cent per share, according to Refinitiv.
Revenue fell 3% to $1.47 billion, lower than the $1.50 billion estimate analysts had forecast.
“2019 was an important inflection point in our turnaround,” said Chairman and CEO Ynon Kreiz, in a press release. “We stabilized our topline after five consecutive years of revenue decline, continued to significantly improve profitability, and achieved positive operating cash flow and positive free cash flow for the first time in three years.”
The cost-cutting initiative brought on by Kreiz has been a push to turn the toy manufacturer into a more profitable and more nimble company by cutting jobs, closing factories and reducing the number of products created.
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