Hasbro, Mattel Say Toy Boom Isn't a One-Off
Last night. We got a terrific from the tell. That's the iconic toymaker. What happens the soccer name. No kidding it actually said because day reminding. Managers found hard to get excited too worried about the ready crew. Gresley bidding up the canvas stocks. But make no mistake. Mattel's doing great. Ceo on crisis orchestrated effort. -nificant turnaround here. And let's have got yet another confidence-inspiring aspiring quarter. The country poorer top and bottom line with bush guide for twenty twenty one in response suck actually spiked. Three percent in early trading. Getting dragged down by the on weeds. What i'm calling the rest of the market. So could this really have room to run. Let's take a closer look with you on crises. The turnaround orders chairman. Ceo patel real. These results michigan. Welcome back demand money. Jim it's great to be here in on your manager word when things weren't doing waste things weren't doing well when things that down very low you said things are starting to get better. This was the finest fourth quarter in fifteen years despite a worldwide pandemic. Talmadge do it. Yes jim this was an exceptional quarter for mattel without best performance in years with strong consumer demand and another milestone near for the company for the second quarter in a row which have double digit sales growth without grace. The industry in gain share on a global basis but are results excited expectation on many levels with the highest fourth quarter growth in fifteen years as you said with a significant increase in profitability with a full year operating income. That was two and a half times higher than than last year. But this is not just about the quarter or the year. It's about a multi year strategy that is tracking very well which puts us on in a strong position to continue to increase profitability and etc growth. In two thousand twenty one and beyond what i liked about it but these were all fantastic numbers but you told me one day jim this company which has terrible cash flow can make fortunes on everything that it does put out so when barbie has a plus eighteen percent quarter number one toy property globally in twenty twenty doll- but boy you're making a lot more money off each barbie even though they're more interesting fascinating diverse inclusive than any of the line. At that i've ever seen as we made significant progress improving. Our ability. Gross margin has increased for the tenth consecutive quarter. And this is only getting better and stronger in terms of cash flow if you look at the journey that we've achieved last three years. Gross margin improved over. Eleven hundred points are cash flow improved by almost five hundred million dollars and our operating income is up more than six hundred and fifty million dollars so very strong performance on the bottom line. And we're making good progress on the top line as well. This was the second quarter in the row where we improve our top line by double digit. You're making it look easy. There was a time. When i first met who. I looked at your balance sheet and i question you're you're not your visibility your viability. The viability certainly taken off the table. Visibilities take off the table. At this point. I now have to wonder. You've got this great balance sheet now. I mean really is you've delivered. You have the number one of the industry you ever. American girl turnaround. Is it time to do something. Even were used something. The entertainment industry that you used to be king of come on free cash flow has steadily improved over the last three years we went from a negative three hundred and twenty five million dollars in two thousand seventeen to a positive one hundred and sixty seven million dollars this year going forward will will be focused on converting an increasing percentage of our ebitda into free cash flow and as we've previously stated we intend to utilize cash to reduce our debt and improve on balance sheet even further given the expectation for higher and more asian of cash. We expect to Continue to reduce our leverage ratio. And make our way towards an investment grade rating.