If Mattel (MAT) wants to stay alive, it may want to get moving on slashing costs. To be sure, it has a big opportunity to do so. 

UBS' research team points out that Mattel's top line sales are 25% lower from their 2013 peak, yet costs and operating expenses are only down 4% during that stretch. One sign of the waste that is ripe for cleanup: UBS estimates that Mattel has 8,000 vendors that are paid $25,000 or less. The company would be wise to consolidate its vendor base to extract cost savings, UBS suggests. 

At least Mattel's new CEO Margo Georgiadis, a former Google (GOOGL) executive, is aware of the opportunity and looks ready to act. After meeting with management, UBS believes Mattel's net cost savings guidance of $515 million by 2020 could prove conservative. 

Mattel said it lost $281.3 million in the fourth quarter vs. a $173.8 million profit in the same period a year ago. For 2017 as a whole, Mattel lost a dizzying $1.05 billion, down sharply from a 2016 profit of $318 million.

Shares of the Barbie and Hot Wheels toy maker have plunged 36% over the past year.

The company faced headwinds on many other fronts last year, including a recent Chapter 11 filing and massive store closings by retailer Toys "R" Us. The chain reportedly accounted for some 20% of Mattel's U.S. sales and 11% of sales internationally.

In addition, Mattel blamed poor North American results on tighter retailer inventory management and "certain under-performing brands." The company said that internationally, results suffered from "inventory-management efforts, unfavorable product mix, and higher freight and logistics expenses."

-Michelle Lodge contributed to this story.

Hasbro (HAS) CEO Brian Goldner explains to TheStreet the impact of the Toys 'R' Us bankruptcy. 

More from Opinion

Musk Goes on Unoriginal Media Tirade

Musk Goes on Unoriginal Media Tirade

What's Happening in Video Games This Week: On the Road to E3

What's Happening in Video Games This Week: On the Road to E3

Wednesday Wrap-Up: Let's Talk About General Electric

Wednesday Wrap-Up: Let's Talk About General Electric

Week of the Women From Finance to Fast Food

Week of the Women From Finance to Fast Food

Tuesday Turnaround: Micron, Autonomous Driving, and J.C. Penney

Tuesday Turnaround: Micron, Autonomous Driving, and J.C. Penney