Please ensure Javascript is enabled for purposes of website accessibility

Why Mattel, Inc. Stock Was Sliding Today

By Jeremy Bowman - Feb 8, 2018 at 1:27PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The toy maker slipped a day after rival Hasbro posted weak results and as a merger between the two companies seemed less likely.

What happened 

Shares of Mattel (MAT -1.12%) were heading lower Thursday, a day after Hasbro (HAS -0.65%), the toy maker's chief rival, posted disappointing holiday-quarter results and its CEO deflected questions about a potential merger between the two companies. The broader market sell-off also seemed to weigh on the stock. 

As a result, Mattel stock was down 6% as of 12:08 p.m., and Hasbro was off 4.6%.

The Barbie Dreamhouse

Image source: Mattel.

So what 

Hasbro's weak report followed a stinker by Mattel last week. The Barbie-parent's sales and profits plunged, though the stock actually rose on a bullish analyst note.

Today, both stocks were down as Hasbro posted a surprise drop in revenue due to cooling sales of Star Wars toys. Overall revenue dipped 2%, missing Hasbro's own growth projection of 4% to 7%. Both toy makers seem to be struggling with the upheaval in the industry brought on by the Toys R Us bankruptcy and kids' growing preference for electronics and digital games over physical toys.

Despite Hasbro's slide, its annual sales actually topped Mattel's for the first time in 24 years.  

Hasbro CEO Brian Goldner also seemed to dismiss a tie-up with Mattel, saying, "We are first and foremost focused on investing in our business." 

Now what 

For Mattel, the volatility is likely to continue. With the ongoing shake-up of the toy industry and shifting tastes among kids, the future doesn't look bright for Mattel. Though the company has touted a turnaround plan, which features cost-cutting, and a focus on innovation and emerging markets, after the stock's long slide in recent years, investors are likely to be skeptical until the numbers improve.

With a disastrous fourth quarter and the upcoming closings of one-fifth of Toys R Us stores, Mattel looks like it will continue to struggle for at least the near future.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Mattel, Inc. Stock Quote
Mattel, Inc.
MAT
$22.08 (-1.12%) $0.25
Hasbro, Inc. Stock Quote
Hasbro, Inc.
HAS
$81.35 (-0.65%) $0.53

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
316%
 
S&P 500 Returns
112%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 07/03/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.