(qlmbusinessnews.com Thurs, 25th Oct, 2023) London, UK —
Barbie Movie Boosts Mattel’s Toy Sales in an Upturn
For years, Mattel's head had been touting movies as the solution to resuscitate the company's slumping sales. Now, the company's latest results underscore just how crucial that boost has become.
During the July to September period of 2023, Barbie's sales soared by 16% compared to the same period in 2022. This remarkable turnaround is primarily credited to the success of Barbie's debut film appearance. The surge in sales has led Mattel to experience its first quarter of growth in a year.
While these results have surpassed expectations, Mattel has chosen to maintain its Christmas sales forecast, cognizant of the limitations of Barbie's influence and the prevailing concerns of economic headwinds curtailing consumer spending.
Mattel revealed in its results statement, “The company is operating in a challenging macro-economic environment with higher volatility, including inflation, that may impact consumer demand.”
Ynon Kreiz, the CEO, had been advocating for investments in films and television shows as a means to revitalise the lacklustre growth that has plagued the entire industry post-pandemic. He expects the industry to face another challenging year, with sales likely to dip compared to 2022.
However, he noted that Mattel has been performing admirably within these conditions, successfully competing with industry peers and enhancing profit margins. He stated, “Our strategy is serving us well. We are very well positioned competitively and expect a strong holiday season.”
The Barbie movie, directed by Greta Gerwig and featuring Margot Robbie and Ryan Gosling, has emerged as this year's highest-grossing film, raking in over $1.4 billion in global ticket sales. Its purpose was to rekindle enthusiasm for the iconic doll, which had witnessed declining sales in the first half of the year. Mattel anticipates that the movie will contribute approximately $125 million to their earnings, with a substantial portion of that already realised.
Mattel's portfolio also includes other brands such as Trolls, Barney, Hot Wheels, and Polly Pocket, which are set to make appearances in upcoming Hollywood productions.
In summary, Mattel reported a 9% sales increase in the third quarter of 2023 compared to the same period in 2022, reaching $1.9 billion. This marks the first quarter of growth since the previous year. However, profits saw a significant drop to $146.3 million, largely attributed to a substantial increase in expected taxes compared to the previous year.
Following the announcement, Mattel's shares dipped by more than 6% in after-hours trading.
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