The head of toymaker Mattel has been saying for years that movies would help the company revive sluggish sales.
The company's latest results show just how much help is needed. Barbie billings jumped 16% in the July to September period compared with 2022, driven by the success of the first ever film starring the doll. The gains marked a big turnaround, helping to lift the company to its first quarter of sales growth in a year.
But despite the stronger-than-expected showing, the firm still left its forecast for Christmas sales intact, reflecting the limits of the Barbie boost and worries that economic challenges will crimp spending.
“The company is operating in a challenging macro-economic environment with higher volatility, including inflation, that may impact consumer demand,” the company told investors in its results.
Boss Ynon Kreiz has been pushing the company to invest in films and television shows as a way to re-ignite growth which has been lacklustre across the industry since a pandemic surge.
This year is likely to be no exception, he said, predicting the sales would fall industry-wide compared with 2022. But he said Mattel was performing well under those conditions, making inroads against its competitors and improving its profit margins.
“Our strategy is serving us well,” he said. “We are very well positioned competitively and expect a strong holiday season.” The Barbie movie, directed by Greta Gerwig and starring Margot Robbie and Ryan Gosling, is the top grossing film of the year so far, earning more than $1.4bn in ticket sales globally.
It was intended to help re-ignite excitement about the doll, which had seen billings decline in the first half of the year. Mattel said it expected a roughly $125m boost from movie, with much of that already realised. Other brands – including Trolls, Barney, Hot Wheels and Polly Pocket – are also set to feature in upcoming Hollywood films.
Overall, Mattel said sales rose 9% in the quarter compared with 2022, hitting $1.9bn. That marked the first quarter of growth since last year. Profits were down significantly to $146.3m. Much of the decline was due to a large rise in the company's expected taxes compared with last year.
Shares in Mattel sank more than 6% in after-hours trade.
— CutC by bbc.com
