Lastly, toy manufacturer, Mattel Inc. (NASDAQ:MAT) declined - 13.77% in the quarter, as a voluntary product recall and trade tensions weighed on shares. Nonetheless, we continue to believe management is making meaningful progress on its multi-year turnaround plan. MAT delivered another earnings beat, highlighted by solid top-line performance and a significant improvement in profitability. In addition, the company is on track to deliver more cost savings than originally targeted, which excludes efficiencies gained through supply chain optimization. Furthermore, the announcement of several new licensing deals and movie agreements for some of its iconic brands in the quarter provide evidence that MAT is also executing on goals to capture the full value from its intellectual property in the mid-to-long term. At today’s valuation, we see the risk/reward skewed sharply to the upside.
From John Rogers (Trades, Portfolio)' second-quarter 2019 Ariel Fund commentary.
