By Savyata Mishra
(Reuters) -Mattel is banking on the box office success of the “Barbie” movie to help drive doll sales in the second half of the year, CEO Ynon Kreiz said on Wednesday, as the toymaker recorded a strong performance in July following the buzz around the film.
The California-based company also posted a surprise profit in the second quarter and its sales exceeded market expectations.
“We have seen improving trends, with Barbie’s month-to-date POS (point of sale) in July turning positive,” Kreiz said in a call with analysts, adding that Mattel’s range of “Barbie” movie-related toys and products will be expanded in the second half, amid strong demand.
The “Barbie” movie made a record-breaking debut in cinemas over the weekend, with $162 million in ticket sales in the United States and Canada.
“While the Barbie blockbuster didn’t happen in Mattel’s Q2, its takeover of pop culture shows the huge potential its IP (intellectual property) has,” said Insider Intelligence analyst Jeremy Goldman.
Mattel is slated to release a Disney Princess film later this year and another one in early 2024, with a Hot Wheels movie set for 2025. Kreiz said the “Barbie” movie’s success will “serve as a template” for collaborations on other Mattel-owned IPs.
However, shares of the company were down 1.8% in extended trading, with Kreiz saying consumers were deferring purchases in anticipation of higher spending during the upcoming holiday season.
The toymaker’s adjusted profit for the quarter ended June 30 came in at 10 cents per share, compared to analysts’ average estimate of a 2 cents loss, as per Refinitiv data.
The company posted a per-share loss in the last quarter, dogged by a broader slowdown in the toy industry and an ongoing inventory adjustment by retailers after 2022’s dour holiday season.
Mattel’s worldwide gross billings – the amount invoiced to customers – for its Barbie segment fell 6% in the quarter, coming behind its Hot Wheels brand, which rose 10%.
Net sales fell 13% to $1.09 billion on a constant currency basis, but still beat analysts’ estimates of $1 billion.
Mattel also maintained its full-year sales and adjusted profit forecast.
Earlier in the day, Mattel’s Chief Operating Officer Richard Dickson, who helped revive the Barbie brand, was appointed CEO of apparel maker Gap. He is set to leave the company on Aug. 3.
(Reporting by Savyata Mishra in Bengaluru; Editing by Pooja Desai)
