CEO Exit Weighs on Mattel

Narrow-moat

In her absence, Ynon Kriez will be taking over as both CEO and Chairman of the board in April. Kriez previously led Market Studios, a global digital media and content network company that was acquired by Disney. His background also contains experience with Endemol Group, an independent television production company, and Fox Kids Europe. We think this deep network of digital and content connections will keep Mattel on its trajectory to building its power brands into connected 360 degree play experiences globally. Our thesis has been that top line opportunity for the toy companies stems from rising international penetration and content driven demand, arenas in which Kriez can help Mattel accelerate its exposure.

We don’t plan to alter our $21.50 fair value which includes first half 2018 sales declines of 4% and an operating margin of minus 12%, down 215 basis points from a 9% shortfall in 2017’s first half. We maintain our Standard stewardship rating, as both the board and the C-suite have been reconstituted to include industry suitable placements over the last year.

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