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Mattel Shares Near 4-Year High as Barbie, Hot Wheels Power Record Sales

Mattel shares are on the move Friday after a "truly exceptional" first quarter that included record sales growth powered by Barbie and Hot Wheels brands.

Mattel  (MAT) - Get Mattel Inc. Report shares surged to the highest levels in more than three years Friday following record first quarter sales growth powered by renewed demand for its iconic Barbie and Hot Wheels toys. 

Mattel said its adjusted loss for the three months ending in March was pegged at 10 cents per share, while reported sales rose 47% -- the highest on record -- to $874 billion as Hot Wheels and Barbie sales help boost the group's topline come in firmly ahead of Street forecasts in what is typically a quiet quarter for toy and entertainment sales. 

Worldwide gross billions for Barbie, Mattel said, surged 87% to more than $276 million, while Hot Wheels sales jumped 16% to $171.6 million, boosted in part by trillions in government stimulus that lead to a 9.8% surge in U.S. March retail sales. 

Mattel also boosted its full-year sales guidance, forecasting an increase of 6% to 8% from 2020 levels, and EBITDA of between $800 million and $825 million.

"This quarter was particularly strong and that we achieved double-digit growth in gross billings in each of our four regions with remarkable performance in North America and EMEA, double-digit growth across all product categories and strong double-digit increases in our three power brands, Barbie, Hot Wheels and Fisher-Price and Thomas & Friends as well as American Girl," CEO Ynon Kreiz told investors on a conference call late Thursday. 

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"In the short-term, we are improving profitability by optimizing our operations and accelerating topline growth, by growing our power brands and expanding our brand portfolio," he added. "In the mid to long-term, we continue to make progress on capturing the full value of our IP, through franchise management and online retail and e-commerce."

Mattel shares were marked 10.6% higher in early trading Friday to change hands at $23.10 each, the highest since late May of 2017 and a move that extends the stock's year-to-date gain to around 32.4%.

"Mattel's  first quarter results were significantly better than expected, fueled by broad-based growth across its product portfolio and strong execution," said BMO Capital Markets analyst Gerrick Johnson, who carries an outperform rating with a $26 price target for the stock. 

"Mattel gained market share in the quarter as its turnaround continues to gain momentum," Johnson added. "Despite the first quarter being a seasonally small quarter, influenced by heavy gift card redemptions and an early Easter, and with the bulk of a very uncertain year ahead, management was confident enough to increase sales and EBITDA guidance."