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Mattel’s American Girl Brand Partners with Toys”R”Us

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Sep. 1 2016, Updated 6:04 p.m. ET

Price movement

Mattel (MAT) has a market cap of $11.3 billion. It fell by 1.3% to close at $33.13 per share on August 31, 2016. The stock’s weekly, monthly, and YTD (year-to-date) price movements were -0.15%, 2.9%, and 26.5%, respectively, on the same day. MAT is trading 0.67% below its 20-day moving average, 2.1% above its 50-day moving average, and 10.7% above its 200-day moving average.

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Related ETFs and peers

The ALPS Sector Dividend Dogs ETF (SDOG) invests 2.2% of its holdings in Mattel. The ETF tracks an equal-weighted index of the five highest-yielding S&P 500 securities in each sector. The YTD price movement of SDOG was 18.9% on August 31.

In comparison, the WisdomTree Dividend Ex-Financials ETF (DTN) invests 2.0% of its holdings in Mattel. The ETF tracks an index selected and weighted by dividends that exclude financial companies.

The market caps of Mattel’s competitors are as follows:

  • Walt Disney (DIS) — $152.4 billion
  • Hasbro (HAS) — $10.2 billion

Latest news on Mattel

In a press release on August 31, 2016, Mattel reported, “ American Girl, a premium brand for girls and subsidiary of Mattel, Inc. (MAT), today announced a multi-year partnership with the world’s leading dedicated toy and baby products retailer, Toys”R”Us, Inc. The collaboration will make Toys”R”Us the first and only U.S.-based retailer to feature American Girl shop-in-shops in select stores, and the exclusive retail partner to carry American Girl’s popular Truly Me line of contemporary 18-inch dolls, doll outfits and accessories. The move marks the first time the company has extended such a broad assortment of its doll product outside of its existing channels.”

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Performance of Mattel in 2Q16

Mattel reported 2Q16 net sales of $957.3 million, a fall of 3.1% from the net sales of $988.2 million in 2Q15. Gross sales of the Mattel Girls & Boys and American Girl brands fell by 8.0% and 19.1%, respectively.

Gross sales of the Fisher-Price and Construction and Arts & Crafts brands rose by 2.8% and 11.6%, respectively, between 2Q15 and 2Q16. The company’s gross profit margin fell by 5.4%.

Mattel’s net income and EPS (earnings per share) fell to -$19.1 million and -$0.06, respectively, in 2Q16, compared with -$11.4 million and -$0.03 in 2Q15. It reported adjusted EPS of -$0.02 in 2Q16, compared with $0.01 in 2Q15.

Mattel’s cash and cash equivalents and inventories rose by 5.8% and 4.5%, respectively, between 2Q15 and 2Q16. Its current ratio and long-term debt-to-equity ratio fell to 1.7x and 0.77x, respectively, in 2Q16, compared with 2.6x and 0.81x, respectively, in 2Q15. In the next part, we’ll discuss Delphi Automotive (DLPH).

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