Mattel Inc. Reported Dogsh*t Numbers
It sure may seem like we have it out for the big box toy retailer. We don't. We just call it like we see it. Last week we called the company a "dumpster fire" on account of the string of emerging negative news. Subsequently, CNBC reported that "poor holiday sales cast doubt on its future" adding, "The poor holiday numbers may require Toys R Us to renegotiate the terms of its debt with its lenders, sources say. They will hover over Toys R Us as it works with debtholders over the next couple of weeks to draft its plans for moving forward. The lenders will have to determine if the Toys R Us business plan is supportable, said the sources." Is it getting hot in here?
Meanwhile, Toys' closure of 180 locations has reportedly exposed 20 CMBS loans with a combined balance of $500mm.
Finally, in our "Dumpster Fire" piece, we also threw shade all over Bloomberg's rosy view for Mattel Inc. ($MAT). Rightfully so, it seems. The company reported dogsh*t holiday numbers: net sales were down 11%, gross sales were down 9%, and North America was the biggest disappointment with net and gross sales were down 17%. The company straight-up blamed the Toys bankruptcy for some of the poor performance as the company reportedly accounts for 20% of Mattel's U.S. sales and 11% of its international sales. Consequently, Mattel is suspending its dividend, shedding non-core underperforming brands, and targeting $650mm in cost reductions. Read: job cuts.