Earnings results often indicate what direction a company will take in the months ahead. With Q1 behind us, let’s have a look at Bark (NYSE:BARK) and its peers.
The toys and electronics industry presents both opportunities and challenges for investors. Established companies often enjoy strong brand recognition and customer loyalty while smaller players can carve out a niche if they develop a viral, hit new product. The downside, however, is that success can be short-lived because the industry is very competitive: the barriers to entry for developing a new toy are low, which can lead to pricing pressures and reduced profit margins, and the rapid pace of technological advancements necessitates continuous product updates, increasing research and development costs, and shortening product life cycles for electronics companies. Furthermore, these players must navigate various regulatory requirements, especially regarding product safety, which can pose operational challenges and potential legal risks.
The 4 toys and electronics stocks we track reported an exceptional Q1. As a group, revenues beat analysts’ consensus estimates by 2.4% while next quarter’s revenue guidance was in line.
In light of this news, share prices of the companies have held steady as they are up 4.5% on average since the latest earnings results.
Weakest Q1: Bark (NYSE:BARK)
Making a name for itself with the BarkBox, Bark (NYSE:BARK) specializes in subscription-based, personalized pet products.
Bark reported revenues of $115.4 million, down 5% year on year. This print fell short of analysts’ expectations by 9.9%. Overall, it was a mixed quarter for the company with an impressive beat of analysts’ EPS estimates but a significant miss of analysts’ adjusted operating income estimates.
Bark delivered the weakest performance against analyst estimates of the whole group. Unsurprisingly, the stock is down 26.9% since reporting and currently trades at $0.99.
Read our full report on Bark here, it’s free.
Best Q1: Hasbro (NASDAQ:HAS)
Credited with the creation of toys such as Mr. Potato Head and the Rubik’s Cube, Hasbro (NASDAQ:HAS) is a global entertainment company offering a diverse range of toys, games, and multimedia experiences for children and families.
Hasbro reported revenues of $887.1 million, up 17.1% year on year, outperforming analysts’ expectations by 14.8%. The business had an incredible quarter with an impressive beat of analysts’ EPS estimates and a solid beat of analysts’ EBITDA estimates.
Hasbro delivered the biggest analyst estimates beat and fastest revenue growth among its peers. The market seems happy with the results as the stock is up 24.1% since reporting. It currently trades at $65.32.
Is now the time to buy Hasbro? Access our full analysis of the earnings results here, it’s free.
Funko (NASDAQ:FNKO)
Boasting partnerships with media franchises like Marvel and One Piece, Funko (NASDAQ:FNKO) is a company specializing in creating and distributing licensed pop culture collectibles.
Funko reported revenues of $190.7 million, down 11.6% year on year, in line with analysts’ expectations. Still, its results were good as it locked in an impressive beat of analysts’ EBITDA estimates.
Funko delivered the slowest revenue growth in the group. Interestingly, the stock is up 5.3% since the results and currently trades at $4.41.
Read our full analysis of Funko’s results here.
Mattel (NASDAQ:MAT)
Known for the creation of iconic toys such as Barbie and Hotwheels, Mattel (NASDAQ:MAT) is a global children's entertainment company specializing in the design and production of consumer products.
Mattel reported revenues of $826.6 million, up 2.1% year on year. This result surpassed analysts’ expectations by 4.4%. It was an exceptional quarter as it also logged an impressive beat of analysts’ EPS estimates and a solid beat of analysts’ EBITDA estimates.
The stock is up 15.8% since reporting and currently trades at $18.73.
Read our full, actionable report on Mattel here, it’s free.
Market Update
As a result of the Fed’s rate hikes in 2022 and 2023, inflation has come down from frothy levels post-pandemic. The general rise in the price of goods and services is trending towards the Fed’s 2% goal as of late, which is good news. The higher rates that fought inflation also didn't slow economic activity enough to catalyze a recession. So far, soft landing. This, combined with recent rate cuts (half a percent in September 2024 and a quarter percent in November 2024) have led to strong stock market performance in 2024. The icing on the cake for 2024 returns was Donald Trump’s victory in the U.S. Presidential Election in early November, sending major indices to all-time highs in the week following the election. Still, debates around the health of the economy and the impact of potential tariffs and corporate tax cuts remain, leaving much uncertainty around 2025.
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