Toy Stocks: Mattel Takes a Hit on Low Sales
According to recent earnings reports, Mattel (NYS: MAT) , the toymaker behind Barbie and Hot Wheels, and saw its first-quarter profit drop by 53%. This fell short of analyst expectations and shares lost more than 9.4% of their value.
The company says the drop was led by costs tied to acquisitions (Mattel announced the purchase of HIT Entertainment in October) and lower sales for its featured products in North America, according to an Associated Press story in Los Angeles Times.
- Worldwide gross sales of Barbie fell 6% in the first quarter. This is the first drop since 2009.
- Sales of Monster High rose 22%.
- American Girl collections rose 4%.
- Sales of the Wheels segment (Hot Wheels/Matchbox and Tyco R/C) fell 6%.
- Sales of Radica and games dropped 17%.
- Fisher Price stayed steady at $310.2 million.
Mattel stated that "timing related to shipping Cars2-related toys last year, plus cautious retailer orders, caused North American revenue to slide 9%."
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But could that be all? The economy has been questionable -- perhaps buying up toys wasn't a top priority for U.S. consumers. If that's the case, will other toy companies be reporting similar earnings?
Here are the top six largest toys and games companies trading on U.S. exchanges. (Click here to access free, interactive tools to analyze these ideas.)
1. Mattel: Engages in the design, manufacture, and marketing of various toy products worldwide. It has a market cap of $11.60 billion. The stock has gained 39.08% over the last year.
2. Hasbro (NYS: HAS) : Engages in the design, manufacture, and marketing of games and toys. It has a market cap of $4.69 billion. Offers a good dividend, and appears to have good liquidity to back it up -- dividend yield at 3.98%, current ratio at 2.39, and quick ratio at 2.04. The stock has lost 18.55% over the last year.
3. LeapFrog Enterprises (NYS: LF) : Provides technology-based learning platforms worldwide. It has a market cap of $550.37 million. This is a risky stock that is significantly more volatile than the overall market (beta of 2.14). The stock has had a good month, gaining 15.32%.
4. JAKKS Pacific (NAS: JAKK) : Designs, produces, markets, and distributes toys and consumer products worldwide. It has a market cap of $456.39 million. Relatively low correlation to the market (beta of 0.71), which may be appealing to risk-averse investors. The stock is a short squeeze candidate, with a short float at 14.44% (equivalent to 21.96 days of average volume). The stock has lost 4.73% over the last year.
5. Kid Brands: Designs, imports, markets, and distributes infant and juvenile consumer products. It has a market cap of $55.23 million. This is a risky stock that is significantly more volatile than the overall market (beta of 2.77). The stock has performed poorly over the last month, losing 18.91%.
6. Gaming Partners International: Engages in the manufacture and supply of casino table game equipment worldwide. It has a market cap of $52.91 million. Relatively low correlation to the market (beta of 0.4), which may be appealing to risk-averse investors. The stock has gained 0.46% over the last year.
Interactive Chart: Press Play to compare changes in analyst ratings over the last two years for the stocks mentioned above. Analyst ratings sourced from Zacks Investment Research.
At the time this article was published Kapitall's Rebecca Lipman does not own any of the shares mentioned above. Data sourced from Finviz.Motley Fool newsletter serviceshave recommended buying shares of LeapFrog Enterprises, Hasbro, and Mattel.Motley Fool newsletter serviceshave recommended creating a bear put spread position in Mattel. The Motley Fool has adisclosure policy. We Fools may not all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. Try any of our Foolish newsletter servicesfree for 30 days.
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