Investing.com – Mattel stock (NASDAQ:MAT) surged 10% Thursday after the company forecast strong business momentum for the current year and the next, pinning its hopes on the pandemic-fueled demand for toys sustaining and growing.
“We are in growth mode and believe we are well-positioned to continue our momentum, with 2022 guidance exceeding prior goals and an even stronger outlook for 2023,” Chairman and CEO Ynon Kreiz said in a statement.
Net sales in the fourth quarter rose 10% to $1.8 billion, riding the demand for its Barbie and Polly Pocket dolls, action figures and building sets. Demand for toys got an unexpected boost from the pandemic when home-struck parents ordered toys for their children to engage with. They were willing to pay more, allowing the company to beat estimates every quarter despite cost pressures.
“We are not necessarily expecting supply chain disruptions to go away, but we do expect to be able to navigate further disruption if it comes,” Reuters quoted Kreiz as saying.
Adjusted profit per share rose by 13 cents to 53 cents and beat estimates comfortably.
Mattel is now projecting its 2021 net sales of $5.4 billion to grow 8% to 10% in the current year. Adjusted EPS is seen at $1.42 to $1.48. The toymaker also lifted its 2023 net sales growth forecast to high-single-digit from a previous outlook of mid-single-digit growth.
Late January, Mattel regained the license to produce Cinderella, Frozen doll characters including Elsa and Anna and other toys based on Disney’s princess lineup. It had lost the license to its bigger rival Hasbro (NASDAQ:HAS) in 2016. The company will start selling new Disney (NYSE:DIS) toys in 2023.
Announcing its earnings Monday, Hasbro forecast growth of “low-single digit” in both annual revenue and operating profit this year.