Mattel Plummets On Lowered Guidance, One Week After Earnings-Inspired Spike

Mattel Inc. MAT shares plummeted more than 18 percent on Friday afternoon after the company issued lower guidance for its first quarter and 2019.

The company issued new guidance during its Toy Fair presentation, saying first-quarter gross sales would be lower than the same quarter of 2018, while full-year 2019 gross sales would be essentially flat, according to Bloomberg.

The company said it would continue to see a low single digit negative impact from the closure of Toys R Us. The company said it sees 2019 gross margin improvement in the low 40s, and adjusted EBITDA for 2019 of $350 million to $400 million. Analysts had exceptions of about $550 million.

Bloomberg quoted a company official as saying Mattel is still in "turnaround mode," and as saying "We have a lot to do."

Up And Down

Just last week, shares of Mattel spiked nearly 15 percent after a surprise revenue beat. The company reported sales of $1.5 billion, far outpacing Street estimates by $84 million on the back of strong Hot Wheels sales. CEO Ynon Kreiz said then that the company was on its way to becoming a high-performing company and creating long-term value, with no indication of any coming change in 2019 guidance.

Mattel shares were down 14.4 percent at $14.42 at time of publication Friday afternoon. Hasbro Inc. HAS was down 5 percent at $85.29.

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