Mattel Down To Strong Sell On Dismal Q3 Results
Zacks Investment Research | Nov 16, 2014 03:38AM ET
On Nov 13, 2014, Zacks Investment Research downgraded Mattel, Inc. (NASDAQ:MAT) compounds the company’s woes. Currently, Mattel holds the rights to develop dolls based on characters from the animated movie, Frozen and Disney Princess.
However, the new deal will grant Hasbro rights to manufacture these dolls. The partnership with Disney had been a savior for Mattel so far. Strong sales of the Frozen line of products helped the company to somewhat mitigate the weak performance of Barbie dolls in the recent quarters.
Meanwhile, Hasbro is reportedly considering the acquisition of DreamWorks Animation SKG Inc. (NASDAQ:DWA ). The combination of these two companies would help both to diversify beyond their core businesses and create a consolidated kids’ entertainment company, thereby boosting Hasbro’s revenues considerably.
Currently, Mattel has partnerships with DreamWorks on several of its product lines. However, if the Hasbro deal takes place, Mattel would not reportedly renew the deals, thereby losing a substantial chunk of its revenues, especially at a time when the toy maker is battling intense competition.
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