Mattel, the renowned toy company, has reported a substantial surge in Barbie sales, with a remarkable 16% increase in the third quarter. The driving force behind this surge is attributed to the blockbuster “Barbie” film, released in July, which has become the highest-grossing film of the year, raking in over $1.4 billion worldwide.
In Mattel’s third-quarter earnings release, CEO Ynon Kreiz credited the success of the Barbie movie, which has evolved into a global cultural phenomenon, marking a significant milestone for the company. The earnings report outperformed Wall Street’s expectations, based on a survey of analysts by LSEG (formerly known as Refinitiv):
- Earnings per share: $1.08 (adjusted) vs. an expected 86 cents
- Revenue: $1.92 billion vs. an expected $1.84 billion
For the quarter ending on September 30, Mattel reported a profit of $146.3 million, equivalent to 41 cents per share, a slight dip from the previous year’s $289.9 million, or 80 cents per share. When adjusted for one-time items, the per-share profit stood at $1.08. Additionally, the revenue climbed by 9% to reach $1.92 billion.
Despite the positive results, Mattel’s stock experienced a 6% decline in after-hours trading on Wednesday. However, it’s important to note that, as of the close of the trading day on Wednesday, the company’s shares had already surged by more than 12% throughout the year.
The success of the “Barbie” movie represents Mattel’s initial foray into a broader strategy of leveraging its intellectual property to inspire potential blockbuster films. This endeavour demonstrates the significant cultural impact and market potential of iconic brands like Barbie.
Barbie is not the only Mattel brand experiencing a substantial boost in sales. Hot Wheels, another prominent brand under Mattel’s umbrella, witnessed a remarkable 22% increase in sales when compared to the same three-month period the previous year. Earlier this year, NBC premiered “Hot Wheels: Ultimate Challenge,” a competition series focused on car makeovers. Mattel had also announced a forthcoming Hot Wheels film in collaboration with Warner Bros., the studio behind the “Barbie” movie.
In light of these positive developments, Mattel has increased its full-year adjusted earnings per share outlook, projecting a range of $1.15 to $1.25, up from the previously anticipated range of $1.10 to $1.20. Furthermore, the company raised its gross margin guidance to 48% from 47%.
During the earnings call, Mattel’s leadership expressed confidence in achieving robust profit growth during the holiday quarter, despite the volatile retail environment. The continued success of Barbie and Hot Wheels, along with Mattel’s expanding strategy of leveraging its iconic brands in the entertainment industry, positions the company for continued growth and innovation in the toy and media sectors.