Mattel has never been one to follow the crowd! From https://www.zacks.com/stock/news/253694/mattel-mat-continues-to-decline-whats-hurting-the-stock ... Lack of innovative schemes for brand awareness and innovation has been affecting the company’s revenues and Point of Sales (POS) momentum. Though overall POS has been mostly positive owing to the company’s efforts to lower retail inventories, the improvement is not broad based. We need to wait for more consistent progress in all its brands.
In fact, Mattel fell short of its 2016 gross margin expectations of nearly 50%. Further, costs related to marketing and promotional initiatives and for cleaning up inventories coupled with the development of digital platforms are likely to keep margins under pressure. Thus, the company pushed out its longer-term target of achieving the low end of the 15-20% operating margin range from 2018 until 2019.
Though the company is undertaking various initiatives, it will take some time for all the brands to show consistent improvement. In fact, both company-specific and industry-wide concerns coupled with decline in the company’s stock price as well as downward estimate revisions suggests that there may be more trouble down the road.
Unless a huge turnaround marks its entry, the slump is likely to continue, making it prudent to get rid of Mattel shares at the moment.