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Mattel, Hasbro Could Win As Toy Retailers Scramble to Stock Up for Holiday
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Tag: MAT
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Use your hair to help your garden or fight pollution. A Bay Area group shows how
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Try answering this off the top of your head: What’s an abundant renewable resource that can spur growth in your garden and clear pollutants from bodies of water?
The answer, according to a Bay Area nonprofit, is hair.
Matter of Trust, an ecologically focused group in San Francisco, has been using hair for more than two decades to clean up oil spills and other pollution from bodies of water. Its latest project is encouraging the growth of vegetation in the Presidio in San Francisco, a national park site.
Matter of Trust is using hair to encourage the growth of vegetation in the Presidio in San Francisco.(Matter of Trust)
The group got its start after learning about Phil McCrory’s hairy idea in the ’90s.
The inspiration came to McCrory, a hair stylist in Alabama, when he was washing a client’s locks as CNN was showing images of otters covered in crude oil from the Exxon Valdez tanker that slammed into an Alaskan reef in 1989.
McCrory realized that in his hands was a fiber that soaks up oils, according to Lisa Gautier, founder of Matter of Trust. But after the haircut, it would be swept up, trashed and dumped in a landfill.
Gautier and McCrory became partners. He developed a way to turn hair, fur, wool or fleece into mats to absorb petroleum. Later, they discovered that the material could be stuffed into recycled burlap sacks and pantyhose to make booms or mats that would soak up oil.
The idea was put to the test in 2007, when a 926-foot cargo ship, the Cosco Busan, sideswiped a support on the San Francisco-Oakland Bay Bridge. The collision opened a nearly 100-foot-long gash on the side of the ship, causing 58,000 gallons of heavy bunker fuel to leak into the ocean.
Within hours, Gautier said, she and her team coordinated hundreds of volunteers to place hair-infused booms and mats along San Francisco’s beaches.
To try to get rid of the waste the booms and mats collected, the team subjected them to two composting methods: worms and thermophilic fungi, or heat-loving bacteria and fungi that can kill pathogens by generating high temperatures. After about 18 months, the hazardous waste was turned into healthy compost, Gautier said.
The hair mats’ latest job, at the Presidio, will test their fertilizing capabilities.
Hair can be formed into mats that soak up oil or can be used as mulch.
(Matter of Trust)
In a pilot study, the hair mats are being used as a mulch on the patchy park land. The results surprised the Presidio Trust’s associate director, Lew Stringer, SFGate reported.
“The sections we planted using that material as substrate clearly grew more robustly than the control areas,” Stringer said.
Bay Area and Los Angeles residents who compost or want to boost the vegetation on their property can use human or pet hair. It’s lightweight, and you can put it on top of the soil in your flower pots and garden, Gautier said. If the hair is longer than 2 inches, bury it in the soil to avoid entangling birds’ feet, she recommends.
If you want to donate hair to Matter of Trust, sign up on the organization’s website, the Hum Sum. Gautier said the group accepts all human, pet and synthetic hair but asks that the various types be packaged separately.
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Karen Garcia
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Mattel announces cost cuts after fourth-quarter results miss expectations
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Toy maker Mattel Inc. on Wednesday reported fourth-quarter results that missed expectations, with the company saying it plans to cut costs this year while continuing to buy back stock.
The cost cuts would follow layoffs by rival Hasbro Inc.
HAS,
+1.34%
amid a slowdown in demand for toys. They also come as other companies over the past several weeks have announced layoffs and plans to tighten up expenses, as investors seek out bigger profit margins.Shares of Mattel
MAT,
+1.57%
were up 1.5% after hours.“Looking ahead, we are launching a new cost-savings program focused on profitable growth and expect to improve profitability and continue share repurchases in 2024,” Mattel Chief Financial Officer Anthony DiSilvestro said in the company’s earnings release.
Mattel — known for its Barbie and Hot Wheels toys and, increasingly, its efforts to turn them into content — reported fourth-quarter net income of $147.3 million, or 42 cents a share. That compares with net income of $16.1 million, or 4 cents a share, in the same quarter in 2022.
Adjusted for things like severance, product recalls and changes to deferred tax assets, Mattel earned 29 cents a share. Sales rose 16% to $1.62 billion.
Analysts polled by FactSet expected Mattel to report adjusted earnings per share of 31 cents, on revenue of $1.65 billion.
“Execution on our toy strategy was strong and we made meaningful progress in entertainment across film, television, digital and publishing,” Chief Executive Ynon Kreiz said in the company’s earnings release.
“We ended 2023 with the strongest balance sheet we have had in years, putting us in an excellent position to execute our strategy to grow Mattel’s IP-driven toy business and expand our entertainment offering,” he continued.
Mattel reported earnings after the key holiday-shopping season, and as analysts try to gauge the sales impact from the success of the “Barbie” movie released last summer. Mattel executives have said they want to make more films based on some of its other popular toys, and turn “Barbie” into a film franchise.
However, toy demand has been cooler recently, thanks to two years of inflation-fueled higher prices for goods and necessities. Retailers have taken a cautious approach toward stocking their shelves, after getting caught two years ago with too many toys and electronics that people didn’t want.
The Wall Street Journal reported this month that activist investor Barington Capital had taken a stake in Mattel, adding that Barington believed the company should consider “pursuing strategic alternatives” for its Fisher-Price and American Girl businesses.
Bank of America analysts on Tuesday said Mattel and Hasbro were among the companies that were “most at risk of direct impact” from shipping disruptions in the Red Sea. Yemen-based Houthi fighters opposed to Israel’s war in Gaza have attacked ships in the area, forcing lengthy detours and driving up shipping costs. Mattel, the analysts noted, got around 24% of its total sales from the Europe, Middle East and Africa regions in 2022.
During a conference in December, Kreiz said he believed in the long-term growth of the toy industry. But he said that after a jump in growth between 2019 and the pandemic, 2023 would likely be tamer.
“We believe 2023 will be back to normal in terms of shopping patterns and consumer behavior,” he said. “And also even inventory at the retail level and at our level is now reverting back to historical norms.”
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Hasbro to lay off more workers amid toy sales slump
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Hasbro Inc. is cutting about 900 jobs as the company is facing a slump in toy and game sales after a boom during the pandemic.
The cost-saving plan will result in “the reallocation of people and resources,” including early retirement for some employees and layoffs over the next two years, Hasbro
HAS,
+0.39%
said in a filing late Monday.The Wall Street Journal reported the layoff plans earlier Monday, citing a memo it had viewed.
The maker of My Little Pony and Monopoly launched the plan in January, and at the time announced the layoffs of about 15% of its workforce.
It has booked about $94 million in expenses related to severance, stock compensation and employee benefits, and expects to book an additional $40 million, the company said in the filing Monday.
Hasbro in October missed third-quarter earnings expectations and slashed its full-year outlook, citing a “softer toy outlook.”
Shares of Hasbro and rival Mattel Inc.
MAT,
+0.05%
fell about 4% and 3%, respectively, in the extended session Monday, as the Wall Street Journal report also cited “early data points to another weak year” for the toy industry following the a boom during the pandemic.Mattel in October reported a better-than-expected third quarter, thanks in part to its wildly successful Barbie movie.
Shares of Mattel have gained 6% this year, which contrasts with a 20% drop for Hasbro stock. Both stocks, however, have underperformed in relation to the S&P 500 index
SPX,
which is up about 20% in 2023.In a February filing, Hasbro said it had about 6,500 employees worldwide as of the end of 2022.
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Hasbro’s stock is having its worst month since the 1980s as toys sales tumble
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Shares of Hasbro Inc. got rocked Thursday, making investors suffer through the worst month in four decades, as a weakening toy market led the company to report disappointing third-quarter results.
Heading into 2023, the toy market was expected to be down in the low-single-digit percentage range for the year, but the market’s performance has been “more challenging that planned,” Chief Executive Chris Cocks said on the post-earnings conference call with analysts.
“We saw the category soften during [the third quarter] to negative 10%,” Cocks said, according to an AlphaSense transcript.
The stock
HAS,
-11.42%
fell 11.5% toward a seven-month low in afternoon trading and was headed for the biggest one-day selloff since it sank 18.7% on March 16, 2020.It has fallen in 14 of the 19 trading days in October, to plunge 26.7% in the month to date. That puts it on track for the worst monthly performance since the record 43.1% selloff in October 1987, the month when “Black Monday” occurred.
Overall, third-quarter revenue fell 10.3% to $1.5 billion, to miss the FactSet consensus of $1.62 billion. The company’s consumer-products business, which includes toys, dropped 17.6% to $956.9 million, missing expectations of $1.1 billion.
Sales for Habro’s entertainment segment fell 41.9% to $122.9 million, below Wall Street projections of $127.8 million, but the company was able to blame that weakness on the effects of the writers and actors strikes on film and TV revenue.
It wasn’t all bad for Hasbro, however. Wizards of the Coast and digital-gaming revenue soared 39.6% to $423.6 million, well above expectations of $390.3 million, amid a more than doubling in digital- and licensed-gaming revenue behind “Baldur’s Gate III” from Larian Studios.
For 2023, the company now expects revenue to be down 13% to 15% from 2022, which is much worse than previous guidance for a decline of 3% to 6%. The current FactSet revenue consensus of $5.5 billion implies a 6.1% decline.
Hasbro also reported a net loss of $171.1 million, or $1.23 a share, after recording net income of $129.2 million, or 93 cents a share, in the same period a year ago. Excluding nonrecurring items, such as losses on assets held for sale, adjusted earnings per share rose to $1.64 from $1.42 but missed the FactSet consensus of $1.72.
CFRA analyst Zachary Warring cut his price target on Hasbro’s stock to $68 from $85 but reiterated his strong buy rating, as the new target implied 40% upside from current levels.
“Even though we were caught offside on this quarter’s results, we believe this is a multi-year opportunity to buy shares and expect digital gaming to continue momentum while consumer products has little downside,” Warring wrote in a note to clients.
Meanwhile, shares of Hasbro rival Mattel Inc.
MAT,
-7.63%
also dropped, down 7.1% toward a four-month low, even though the company’s third-quarter profit and sales beat expectations. That’s because strong sales of Barbie, Disney Princess and Disney Frozen dolls offset weakness in toys.Mattel said it expects toy-industry sales to decline in the mid-single-digit percentage range for the year.
Mattel’s stock was down 15.2% in October, while the S&P 500
SPX
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MAT Stock Price | Mattel Inc. Stock Quote (U.S.: Nasdaq) | MarketWatch
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Mattel Inc.
Mattel, Inc. is a global children’s entertainment company that specializes in the design and production of toys and consumer products. The company engages consumers through its portfolio of iconic franchises, including Barbie, Hot Wheels, American Girl, Fisher-Price, Thomas & Friends, UNO and MEGA. It operates through the following segments: North America, International and American Girl. The North America and International segments market and sell products organized into the following categories: Dolls, Infant, Toddler, Preschool, Vehicles, Action Figures, Building Sets, and Games. The American Girl Brands segment markets and sells historical dolls, books, and accessories through the Truly Me, Girl of the Year, Bitty Baby, and WellieWishers brands. The company was founded by Elliot Handler, Ruth Handler and Harold Matson in 1945 and is headquartered in El Segundo, CA.
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Cheap? Maybe. But These Stocks Have Been Dead Money for Decades
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Cheesecake Factory appears to be “running the same play,” wrote J.P. Morgan analyst John Ivankoe in a recent restaurant industry outlook. I don’t think he meant it as a compliment—the stock, he noted, trades where it did in 2004, adjusted for splits.
Why the long stall-out? My first thought was that maybe hitting the mall for a hypercaloric sit-down meal off a menu the size of a Gutenberg Bible has fallen out of favor over the years. But no: Sales have bounced back and then some from the Covid pandemic, with plenty of takeout business and dessert orders. The average
Cheesecake Factory
(ticker: CAKE) restaurant does more than $10 million in yearly sales, or twice as much as an Olive Garden.[ad_2]
