S&P lifts Mattel

S&P said it upgraded Mattel Inc. and its unsecured notes with unrated subsidiary guarantees to BB+ from BB and raised the unsecured notes without subsidiary guarantees to BB- from B+. The recovery ratings of 3 and 6, respectively, remain unchanged.

“The upgrade to BB+ reflects our expectation that Mattel will sustain leverage below 3x. Good demand for toys continued through the 2021 holiday selling season, and Mattel exceeded its guidance for the full year. In 2021, Mattel reported 19% net sales growth and strength across its portfolio of core brands. Gross sales for Barbie, Hot Wheels, and Fisher Price grew 24%, 12%, and 6%, respectively,” S&P said in a press release.

The company also reported adjusted EBITDA growth in 2021 compared with 2020 despite cost inflation due to volume improvements, price increases and the continued success of its cost cutting programs, the agency said.

The outlook is positive.

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