Quarterly reports of two consumer-oriented stocks released this morning had very different results. Leigh Drogen, CEO of Estimize and Yahoo Finance's Jeff Macke joined Lauren Lyster to discuss toymaker Mattel (MAT) and burrito chain Chipotle Mexican Grill (CMG).
Mattel, maker of the iconic Barbie and Fisher-Price toys, reported a loss $11.2 million or $0.03 per share. Worldwide sales for Barbie and Fisher-Price brands both fell, 14% and 6% respectively, though sales for its American Girl line rose 5%. Total worldwide sales fell 5% to $946.2 million.
Drogen said, “Kids aren’t playing with these dolls anymore. They’re playing with apps,” he said. "Look at Candy Crush. It’s making a ton of money.”
Macke agreed. “So make apps, Mattel,” he said. Macke compared Mattel to Coca-Cola (KO), saying that soda sales are in decline. So, what did they do? “Coca-Cola went out and bought a bunch of water instead,” Macke said, referring to their $4.2 billion purchase of Glaceau, maker of Vitaminwater and Smartwater, in 2007.
Macke said Mattel should think more broadly. He said the company needs to think beyond toys. “Mattel seems to be stuck on the idea that, ‘We sell Barbie dolls.’ Get over it."
“Entertain kids," he said. “Your job is to amuse children.”
Meanwhile, there was much better news for Chipotle Mexican Grill. Earnings per share came in at $2.64, below estimates of $2.86 a share. Revenue, however, increased 24.4% to $904.2 million, beating Wall Street estimates of $874 million. Drogen said Chipotle has solved its issue of serving customers without waiting for long periods in line. “It’s really amazing,” he said. “You walk into that store and there’s like eight people on that line serving you the food now.”
“It amazing how well they’ve done managing that company,” he added.
- Consumer Discretionary
- Chipotle Mexican Grill
- Jeff Macke