MAT stock surged 19% in early trading after Mattel Inc (NASDAQ:MAT) reported Q3 results that topped analysts’ projections. The company’s impressive Q3 received a boost from the recovery of the Barbie doll collection as well as other classic toys. This is an indication that Mattel’s multiyear turnaround has continued to gather momentum.
Barbie Dolls Boost Mattel’s Q3 Performance
The company indicated that it earned around $70.6 million or $0.20 per share in the third quarter compared to $6.3 million or $0.02 per share earned in Q3 last year. Mattel’s adjusted earnings per share of $0.26 exceeded analysts’ earnings estimates of $0.08 per share. The toymaker reported YoY revenue growth of 3% to $1.48 billion, bettering the average analyst forecast of $1.42 billion.
The company has been reviving the Barbie doll collection, and it saw gross sales grow by 10%. The dolls now have different body types as well as skin tones. Mattel also saw sales of Hot Wheels grow by 25%. The company has also quoted the successful launch of toys based on the iconic 7-member boy band BTS.
In a statement, Ynon Kreiz, the CEO of Mattel, indicated that the company’s performance in Q3 is an indication of its continued growth momentum for the multiyear turnaround. The CEO indicated that the company is unaffected by the tariff hikes on toys coming from China before the December 15 deadline. Kreiz gave assurance that its retail partners are ready and well prepared for the possible impacts of the tariff increase.
MAT stock is up 16.85% at $12.35.
Mattel Understated Tax Expense in Q3 2017
The company has indicated that it has completed an independent probe regarding the whistle-blower allegations. A whistle-blower letter disclosed on August 8 questioned the independence of Mattel’s outside auditor as well as whether there were accounting mistakes in the previous periods.
The investigation established that Mattel’s income tax expenditure for Q3 2017 was understated without an impact on the FY. The CEO at the time, Margaret Georgiadis, did not disclose the error. The investigation also determined that the company has some weaknesses regarding its internal control of financial reporting.
MAT stock has soared over 33% since the beginning of this year.
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