What to expect from Mattel's (MAT) Q3 earnings

What happened

Mattel is scheduled to report its third-quarter results this Thursday after the market closes. Analysts expect revenue to rise 5.5% year on year, following a 5.9% decline in the same quarter last year. Last quarter, Mattel beat revenue estimates but missed estimates for earnings per share and EBITDA.

Confirmed

Global impact / market context

Revenue growth would indicate whether demand improved from the year-earlier quarter, but sales alone do not show whether Mattel is earning more from each sale. The prior earnings and EBITDA misses make profit measures important for judging whether growth is translating into stronger operating performance.

Analyst inference

Analysts have generally reconfirmed their estimates over the past 30 days, pointing to expectations that business will stay on course. Results from Hasbro and Hilton Grand Vacations were stronger than expected, but those companies are not a direct measure of Mattel’s own sales or profits.

Analyst inference

What to watch

1. Compare reported revenue with the expected 5.5% year-on-year increase; a miss could suggest demand is weaker than analysts currently expect. Analyst inference
2. Check earnings per share, or profit allocated to each share, and EBITDA, a measure of operating earnings, against estimates after last quarter’s misses. Analyst inference
3. Look for management’s explanation of sales trends and outlook, especially whether it supports the expectation that the business will stay on course. Analyst inference

Evidence

• stockstory.org