In the playful world of toys, Mattel wound up its engines and announced a 9% increase in its third-quarter 2023 net sales, reaching $1.92 billion, with Barbie being the star of the show, alongside Hot Wheels.
Mattel observed a rise in global gross billings, with doll sales surging by 27%, resulting in $885 million in revenue. Vehicle sales, primarily fueled by the success of Hot Wheels, also saw an 18% increase year over year, generating $519 million.
The company credited its ability to create brands that “resonate so strongly in culture.”
In fact, during the company’s most recent earnings call on Wednesday (Oct 25), Ynon Kreiz, the chairman and CEO of Mattel, said that its reach goes far beyond the confines of the toy aisle, appealing to a diverse and extensive audience.
To accomplish this, Kreiz highlighted how the company harnessed its capabilities, vast retail network and partnership with Warner Bros. to drive the promotion and marketing of the Barbie movie, resulting in its transformation into a cultural sensation. Consequently, these resources, partnerships and competencies firmly establish Mattel as an appealing contender in the market.
Kreiz further emphasized that the success of the Barbie movie is anticipated to expedite their strategic endeavors, extending beyond the realm of movies into various other verticals, owing to the robust presence of their brands and their significant influence in popular culture.
These sentiments are in line with an earlier PYMNTS report, which unveiled that when the much-anticipated “Barbie” movie premiered, it shattered the opening weekend record for the year, raking in $155 million in the United States and a staggering $337 million worldwide.
“The Barbie movie is a showcase for the cultural resonance of our IP [intellectual property], our ability to attract and collaborate with top creative talent, and the capabilities of our franchise management organization. This also speaks to the potential of Mattel Films and the significant progress of our strategy to capture the full value of our IP,” Kreiz said during the company’s second-quarter earnings call in July.
Despite these positive developments, the company maintained a cautious stance regarding its future outlook, citing the challenges confronting the global toy industry. Mattel anticipated that its full-year sales would remain on par with the previous year, at $5.4 billion, largely due to the ongoing instability in the broader economy.
As indicated in the company press release, the company is navigating a complex macro-economic landscape characterized by elevated volatility, particularly in relation to inflation, which could potentially affect consumer demand.
In the quarter, the company disclosed a net income of $146.3 million, marking a 50% decline from the $289.9 million reported in the corresponding quarter of the previous year.
In the third quarter, there was a 10% increase in net sales in North America, primarily fueled by strong sales of dolls such as Barbie, Disney Princess, Monster High and Disney Frozen. Furthermore, an increasing consumer interest in Hot Wheels toys not only helped alleviate the downturn in sales of action figures, building sets and games, but also made a substantial contribution to bolstering international sales.
Mattel also reported an area of weakness: the American Girl, brand which saw sales for the 18-inch doll line drop 13%.
As the toy company seeks to establish relevance beyond the toy aisle, Kreiz highlighted the company’s intention to expand its IP-driven toy business.
With that in mind, it’s worth asking: does Mattel have a movie or collaboration for American Girl in the pipeline?