Mattel is seeing strong growth in sales of both Barbie and Hot Wheels products as consumers return to in-person shopping, pushing the children’s entertainment company to a better-than-expected second quarter.
Dolls, including Barbie, saw $395 million in gross billings in the three months ending June 30, a 51 percent jump versus 2020; Barbie alone grew 41 percent. Vehicles, including Hot Wheels, had $266 million in gross billings, a 68 percent increase based on increased in-store impulse buying. Hot Wheels alone grew 61 percent.
Mattel has been working to diversify its Barbie line in recent years, including through its Barbie Role Model series. The most recent release in the series, a Barbie doll modeled on tennis star Naomi Osaka, sold out just hours after it was released earlier this month, according to CNN.
The California-based company also last month released a new line of Barbies, called Barbie Loves the Ocean, made from recycled ocean-bound plastic. Mattel aims to achieve 100 percent recycled, recyclable or bio-based plastic materials across all products and packaging by 2030.
Overall, Mattel sales reached over $1 billion, up 40 percent year over year. For comparison, competitor Hasbro said on Monday (July 26) that it saw a 54 percent year-over-year increase in revenue in the second quarter, to $1.3 billion, on the back of its digital and entertainment businesses, which helped make up for slower board game sales.
Ynon Kreiz, chairman and CEO of Mattel, said the company is “in the strongest position we have been in many years.” Despite supply chain disruptions in the second quarter, Kreiz said Mattel saw no material impact on its results because of restructuring efforts the company has undertaken in recent years.
“The toy industry proved its resilience yet again in the second quarter, not because of stimulus checks but just given the fundamentals of the category and the importance of physical play, and it continues to be a strategic category for retailers,” he told investors and analysts on a conference call.
Having completed the “heavy lifting” of its strategic transformation over the past three years, Kreiz said Mattel is now focused on establishing itself as a “high-performing toy company” driven by its intellectual properties (IPs).
And so far, it appears to be working: A Masters of the Universe series that premiered on Netflix last week, serving as a relaunch of the brand, was the No. 1 kids’ TV show in the U.S. on the streaming platform.
Mattel currently has 13 feature film projects that have been announced, 18 TV shows and specials in production and 24 projects in development. In addition to a new Barbie special coming to Netflix in September and another Masters of the Universe series premiering this fall, the company is also developing a live-action Polly Pocket movie with MGM. Additionally, a Barbie movie written and directed by Greta Gerwig and starring Margot Robbie has been greenlit after years of stops and starts, with an anticipated release date of 2023.
Mattel also last month announced a non-fungible token (NFT) series of Hot Wheels, though that particular endeavor may have come too late. While NFTs are still popular, the market has dramatically cooled, dropping 90 percent over the course of a month.
With Barbie driving growth in her pink convertible, Mattel said it is updating its full-year guidance, now projecting net sales growth to reach between 12 and 14 percent — nearly double the guidance provided earlier this year.
“There are a lot of growth drivers, a lot of opportunities ahead of us,” the CEO said, including the relaunch of three new IPs —Masters of the Universe, Monster High and Matchbox — and expanding partnerships with entertainment companies.
Like Hasbro, Mattel is planning to raise prices in the second half of the year to cover higher commodity and transportation costs, but Kreiz said he’s optimistic about the holiday shopping season.
“It’s too early to talk about the holiday in detail, but … we do feel very good about brand momentum and all the plans we have in place right now,” the CEO said, adding that he’s confident Mattel has the scale to work with retail partners to meet demand. “Of course, there could be still unanticipated supply chain challenges, and it’s hard to tell what the future may hold, but we have proven that we have the ability to manage major disruptions,” Kreiz added.
Year to date, Mattel’s stock has increased nearly 18 percent, compared to the S&P 500’s 17 percent rise. The toymaker currently has a market capitalization of over $7 billion.