On January 4, Mattel (MAT) stock rose 12.3% and closed trading at $10.41. Strength in the overall markets could have driven the stock. On January 4, the S&P 500 and the Dow Jones rose 3.4% and 3.3%, respectively, due to strong US jobs data. In December, the non-farm payroll employment increased by 312,000, as reported by the Bureau of Labor Statistics.
Speaking at the American Economic Association’s annual meeting, Fed Chair Jerome Powell stated on January 4 that the Fed would be flexible in 2019 regarding interest rate hikes. His comments were a relief for some investors. According to CNBC, Powell said, “No one knows whether this year will be like 2016. But what I do know is that we will be prepared to adjust policy quickly and flexibly and to use all of our tools to support the economy should that be appropriate to keep the expansion on track, to keep the labor market strong and to keep inflation near 2 percent.”
What’s in store for Mattel in 2019?
For Mattel, 2018 was a tough year due to the liquidation of Toys “R” Us. Persistent weakness in some of Mattel’s brands (Fisher-Price, American Girl, and Thomas & Friends) also added to its woes. For fiscal 2018, analysts expect the sales to decline 8.9% YoY to $4.45 billion. Mattel hasn’t provided a sales outlook for fiscal 2018 or the holiday quarter.
For fiscal 2019, Mattel’s management is confident that Toys “R” Us won’t be a concern. Mattel is positive about its long-term growth in China. For Europe, Mattel is developing its relations with value retailers. Mattel is enhancing its digital platform to capture market share in Europe.
Barbie and Hot Wheels sales are strong. The new Thomas & Friends TV series will likely drive the sales of the new Fisher-Price product line to be launched in 2019, according to Mattel. The company is also positive about Mattel Films—a movie studio created to develop content based on its vast intellectual property.
For fiscal 2019, analysts expect Mattel’s sales to rise 4.1% year-over-year to $4.63 billion.