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Will Soft North America Sales Hurt Mattel (MAT) Q3 Earnings?

Zacks Equity Research

Mattel, Inc. MAT is scheduled to report third-quarter 2019 results on Oct 29, after the closing bell. In the last reported quarter, the company’s earnings surpassed the Zacks Consensus Estimate by 28.6%.

Which Way Are Estimates Moving?

The Zacks Consensus Estimate for third-quarter earnings is pegged at 8 cents, lower than the year-ago quarter figure of 18 cents. Over the past 30 days, the company’s earnings estimates have moved south by 11.1%. For quarterly revenues, the consensus mark stands at $1,421 million, suggesting a decline of 1.2% from prior-year quarter reported figure.

Let’s delve deeper and analyze the factors likely to shape the company’s third-quarter results.

Factors at Play

Mattel third-quarter results are likely to have been hurt by dismal Power Brands and North America revenues. The company has been focusing on advertising, marketing and promotional activities to improve POS momentum and drive sales. Despite growing pipeline of tech-enabled products that capitalize on new play patterns, the company might have failed to revive sales in the third quarter.

Per the Zacks Consensus Estimate, Power Brands total revenues are likely to decline nearly 7% to $1,008 million. Moreover, North America gross revenues are expected to decrease 4.8% to $886.3 million.

However, robust Barbie sales across all regions are likely to have positively impacted the company’s third-quarter results. In the second quarter of 2019, gross Barbie sales were up 13% in constant currency. This marked the seventh consecutive quarter of year-over-year growth for Barbie.

Mattel, Inc. Price and EPS Surprise

 

Mattel, Inc. Price and EPS Surprise

Mattel, Inc. price-eps-surprise | Mattel, Inc. Quote

 

What Does the Zacks Model Say?

Our proven model does not conclusively predict an earnings beat for Mattel this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that's not the case here.

You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Although Mattel has a Zacks Rank #3, its Earnings ESP of 0.00% makes surprise prediction difficult.

Stocks Poised to Beat Earnings Estimates

Here are some stocks from the Zacks Consumer Discretionary space that investors may consider, as our model shows that these have the right combination of elements to deliver an earnings beat in third-quarter 2019.

Deckers Outdoor Corporation DECK has an Earnings ESP of +3.17% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Fox Corporation FOXA has an Earnings ESP of +2.90% and a Zacks Rank #3.

Wyndham Destinations, Inc. WYND has an Earnings ESP of +0.14% and a Zacks Rank #3.
 
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Fox Corporation (FOXA) : Free Stock Analysis Report
 
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Mattel, Inc. (MAT) : Free Stock Analysis Report
 
WYNDHAM DESTINATIONS, INC. (WYND) : Free Stock Analysis Report
 
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