Mattel, Inc. investors may receive additional information about the case by clicking the link "Join this Class Action" above.
According to the complaint, Mattel designs, manufactures, and markets a range of toy products worldwide. The Class Period commences on October 20, 2016. After the market closed on October 19, 2016, Mattel issued a press release announcing its third quarter 2016 financial results.
The complaint alleges that, on January 25, 2017, Mattel issued a press release announcing its fourth quarter 2016 and year-end financial results for the period ending December 31, 2016. For the fourth quarter 2016, Mattel reported that, on a year-over-basis, worldwide net sales declined by 8% to $1.83 billion, gross margins declined by 14% to 47.0% and operating income declined by 11% to $262.6 million. Later that day, Mattel held a conference call with analysts and investors. During the conference call, Christopher A. Sinclair, Mattel’s Chief Executive Officer (“CEO”) and Chairman of its Board of Directors until February 8, 2017, stated that Mattel’s gross margins were “significantly impacted by elevated sales adjustments and by heavier discounting,” which, in turn, had adversely impacted the cash generated by Mattel’s operations.
Following this news, the price of Mattel stock fell approximately 18%, or $5.57 per share, on heavy trading volume to close at $25.99 per share on January 26, 2017.
Then, after the market closed on April 20, 2017, Mattel announced its operating results for the 2017 fiscal first quarter. The results were significantly less than Wall Street securities analysts’ consensus estimates due to a “retail inventory overhang coming out of the holiday period.” Mattel’s newly appointed CEO, Margaret Georgiadis, noted that retail inventory levels during the first quarter 2017 were such that they had a “prolonged impact” on customer reorders.
Following this news, the price of Mattel stock fell approximately 14%, or $3.42 per share, on heavy trading volume to close at $21.79 per share on April 21, 2017.
The complaint alleges that, throughout the Class Period, the defendants made false and/or misleading statements because they misrepresented and failed to disclose the following adverse facts, which were known to defendants or recklessly disregarded by them: (a) prior to and during the Class Period, Mattel’s retail customers were loaded with extremely high levels of unsold Mattel product; (b) as a result of Mattel’s unusually high levels of unsold inventory at its retailers, Mattel was exposed to the heightened risk that it would have to issue its retailers financial concessions (in the form of sales adjustments, discounts and promotions) to remove such excess inventory, as well as the heightened risk that Mattel would experience slower sales growth in future periods; (c) the representations in Mattel’s third quarter Form 10-Q about its risk factors and disclosure controls were materially false and misleading; and (d) as a result of the foregoing, defendants lacked a reasonable basis for their positive statements about Mattel’s then-current business and future financial prospects.
If you are a member of the class described above, you may no later than August 26, 2017 move the Court to serve as lead plaintiff of the class, if you so choose.
A lead plaintiff is a representative party that acts on behalf of other class members in directing the litigation. In order to be appointed lead plaintiff, the Court must determine that the class member’s claim is typical of the claims of other class members, and that the class member will adequately represent the class. Your ability to share in any recovery is not, however, affected by the decision whether or not to serve as a lead plaintiff. Any member of the purported class may move the court to serve as a lead plaintiff through counsel of their choice, or may choose to do nothing and remain an inactive class member.
Kessler Topaz Meltzer & Check, LLP has not filed a complaint in this matter. If you wish to discuss this action or have any questions concerning this notice or your rights or interests with respect to these matters, please contact Kessler Topaz Meltzer & Check, LLP toll free at 1-888-299-7706 or 1-610-667-7706, or via e-mail at firstname.lastname@example.org. For more information about Kessler Topaz Meltzer & Check, LLP, please visit our website at http://www.ktmc.com. If you would like additional information about the suit, please fill out the attached form as promptly as possible and return it by fax to 610-667-7056, or by mail in the enclosed envelope.
Kessler Topaz Meltzer & Check, LLP
James Maro, Esq. or Adrienne Bell, Esq.
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Radnor, PA 19087
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