Spotting Winners: Bark (NYSE:BARK) And Toys and Electronics Stocks In Q2
The end of an earnings season can be a great time to discover new stocks and assess how companies are handling the current business environment. Let’s take a look at how Bark (NYSE:BARK) and the rest of the toys and electronics stocks fared in Q2.
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 a very strong Q2. As a group, revenues beat analysts’ consensus estimates by 3.2% while next quarter’s revenue guidance was 4% below.
Big picture, the Federal Reserve has a dual mandate of inflation and employment. The former had been running hot throughout 2021 and 2022 but cooled towards the central bank's 2% target as of late. This prompted the Fed to cut its policy rate by 50bps (half a percent) in September 2024. Given recent employment data that suggests the US economy could be wobbling, the markets will be assessing whether this rate and future cuts (the Fed signaled more to come in 2024 and 2025) are the right moves at the right time or whether they're too little, too late for a macro that has already cooled.
Luckily, toys and electronics stocks have performed well with share prices up 21.4% on average since the latest earnings results.
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 $116.2 million, down 3.6% year on year. This print exceeded analysts’ expectations by 1.7%. Overall, it was a strong quarter for the company with an impressive beat of analysts’ earnings estimates.
"Fiscal 2025 is off to a strong start, building on the momentum we established last year. Our first quarter results are a testament to our continued progress, and we remain confident in our ability to deliver revenue growth through the year and achieve our first full year of positive Adjusted EBITDA and free cash flow," said Matt Meeker, Co-Founder and Chief Executive Officer.
Unsurprisingly, the stock is up 19.1% since reporting and currently trades at $1.56.
Is now the time to buy Bark? Access our full analysis of the earnings results here, it’s free.
Best Q2: 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 $995.3 million, down 17.7% year on year, outperforming analysts’ expectations by 5.5%. The business had an exceptional quarter with an impressive beat of analysts’ earnings estimates.
The market seems happy with the results as the stock is up 20.8% since reporting. It currently trades at $71.85.
Is now the time to buy Hasbro? Access our full analysis of the earnings results here, it’s free.
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 $1.08 billion, flat year on year, falling short of analysts’ expectations by 1.8%. It was a mixed quarter as it posted a decent beat of analysts’ earnings estimates.
Mattel delivered the weakest performance against analyst estimates in the group. Interestingly, the stock is up 8.6% since the results and currently trades at $18.75.
Read our full analysis of Mattel’s results here.
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 $247.7 million, up 3.2% year on year. This print beat analysts’ expectations by 7.2%. Overall, it was a very strong quarter as it also recorded an impressive beat of analysts’ earnings estimates.
Funko pulled off the biggest analyst estimates beat and best revenue growth, but had the weakest full-year guidance update among its peers. The stock is up 37% since reporting and currently trades at $11.85.
Read our full, actionable report on Funko here, it’s free.
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