Mattel, riding the success of the Barbie movie, posted quarterly results that beat Wall Street estimates, but the toymaker maintained its full-year sales outlook due to softness in the industry and a weaker global economy.
Third-quarter earnings rose to $1.08 a share, Mattel said Wednesday, easily beating the 86-cent average of analysts’ estimates. Sales grew 9.3% to $1.92 billion, exceeding projections of $1.84 billion as shoppers snapped up Barbie dolls and other mainstays like Hot Wheels cars.
Despite the quarterly gain, Mattel continues to expect full-year sales to match the $5.44 billion recorded in 2022. That’s a reflection of tougher industry conditions after pandemic-fueled spending petered out and a weaker global economy, Chief Executive Officer Ynon Kreiz said in an interview.
“The toy industry is well positioned for future growth, and we believe retailers are well prepared for the holiday season,” Kreiz said.
Shares of Mattel fell as much as 10% to $18.11 in extended trading after the results were announced. They were up 13% this year through the close Wednesday in New York.
Mattel lifted its 2023 profit forecast by 5 cents a share, and now expects $1.15 to $1.25 a share, thanks in part to cost-cutting initiatives. Analysts project full-year earnings of $1.20 a share and revenue of $5.49 billion, the average of estimates compiled by Bloomberg.
Barbie, directed by Greta Gerwig and starring Margot Robbie, is the highest grossing film of 2023 and has become a big public showcase for Mattel’s flagship toy.
The Margot Robbie Barbie doll is selling especially well, and management expects it to be a “hot toy” on Christmas shopping lists, Kreiz said. Hot Wheels is poised for its sixth year of record sales and actually grew faster than Barbie last quarter.
Since its July release, the Barbie movie has generated more than $1.4 billion in global ticket sales and is the highest-grossing picture ever made by Warner Bros.
As a production partner on the movie, Mattel receives a share of ticket sales and streaming revenue. Chief Financial Officer Anthony DiSilvestro said at a Goldman Sachs investor conference last month that he expects the film to generate about $125 million in sales for Mattel this year.
Kreiz said earlier this year that Mattel would see a larger benefit from the movie’s success in the second half, with its popularity driving demand for dolls and other Barbie-branded products.
Overall, Mattel’s doll sales soared 24% on a constant currency basis during the third quarter, when retailers start placing orders for the holiday season. Barbie sales were up 16%, and results in the doll business were also driven by the Disney and Monster High lines, Mattel said.
Barbie is Mattel’s first theatrical release under a strategy Kreiz devised upon taking the CEO role in 2018. He’s seeking to bring more of the company’s brands to the screen as movies or TV shows and is developing films based Hot Wheels, Polly Pocket and a dozen others.