Mattel misses by $0.49, misses on revs; suspends quarterly dividend
- Reports Q3 (Sep) earnings of $0.09 per share, excluding non-recurring items, $0.49 worse than the Capital IQ Consensus of $0.58; revenues fell 13.1% year/year to $1.56 bln vs the $1.82 bln Capital IQ Consensus.
- For the third quarter, net sales in the North American Region decreased by 22% as reported and in constant currency, versus the prior year's third quarter; gross sales in the North American Region also decreased by 22% as reported and in constant currency, primarily driven by lower sales as a result of Toys "R" Us filing for bankruptcy and tighter retailer inventory management. In the International Region, net sales increased by 1% as reported, and decreased by 1% in constant currency; gross sales in the International Region were flat as reported, and decreased by 2% in constant currency.
- "Our Q3 performance was clearly disappointing, led by compression in North America driven by Toys "R" Us filing for bankruptcy, tighter retailer inventory management and challenges with certain underperforming brands," said Margo Georgiadis, CEO of Mattel. "Despite these challenges, we are making strong progress against our transformation plan, which we believe will deliver step change revenue growth and profitability. To accelerate progress toward these goals, with our new leadership team in place, we are taking bold steps to simplify our business and right size our cost structure in alignment with our strategy. This will enable us to move faster to realize our most attractive opportunities as well as to unlock significant resources to invest in our transformation. We are optimistic about the future of Mattel and our ability to reposition the company to drive enhanced returns for shareholders."
- The Board of Directors determined to suspend the Company's quarterly dividend beginning in the fourth quarter of 2017 in order to increase financial flexibility, strengthen the balance sheet and facilitate strategic investments. The suspension of the quarterly dividend, which was previously $0.15 per share, is expected to result in additional liquidity of approximately $50 million per quarter.
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