Mattel Inc., the renowned toy maker, announced its second-quarter results on Wednesday, which exceeded expectations. Despite a stellar opening weekend for the “Barbie” movie, the company’s full-year outlook remains unchanged due to persistent lackluster demand for toys.
Financial Highlights
- Second-quarter net income was $27 million, or 8 cents per share, compared to $66 million, or 18 cents per share, in the same period last year.
- Revenue fell by 12% to $1.09 billion, compared to $1.24 billion in the prior-year quarter.
- Adjusted earnings, excluding severance and restructuring costs and the impact of a product recall, amounted to 10 cents per share.
The analysts surveyed by FactSet had anticipated an adjusted per-share loss of 3 cents on sales of $1 billion.
Full-Year Outlook
For the entire year, Mattel maintains its earlier projection of adjusted earnings per share ranging from $1.10 to $1.20, after accounting for currency fluctuations.
Retailer Cautionary Notes
Anthony DiSilvestro, Chief Financial Officer of Mattel, expressed retailers’ continued hesitancy in restocking their inventory with additional toys. However, he noted that efforts to clear out excess stockpiles resulting from reduced demand in various sectors were mostly in the past.
“While there has been some improvement compared to the first quarter, our financial results for the second quarter were negatively affected by ongoing inventory management by retailers and overall industry softness,” DiSilvestro explained.
Mattel’s ability to beat estimates in the face of challenging conditions showcases its resilience and commitment to delivering value to its stakeholders.
Barbie Movie Boosts Mattel’s Earnings
Mattel, the maker of Barbie dolls, recently reported strong earnings following the release of the highly anticipated “Barbie” movie. Produced by Warner Bros. Discovery Inc., the film generated a whopping $155 million domestically and $182 million internationally over its opening weekend, making it one of the most successful box-office debuts.
Mattel’s CEO, Ynon Kreiz, expressed excitement about the film, calling it the company’s “first ever major theatrical film.” He believes that the movie serves as a testament to the cultural relevance of Mattel’s iconic dolls and action figures.
While Barbie has always been Mattel’s most profitable franchise, demand for the brand slowed down after the initial surge during the pandemic. In addition, rising inflation and increased spending on essential goods have impacted consumer buying habits. As a result, competitor Hasbro Inc. announced plans to reduce its workforce earlier this year.
Despite these challenges, Mattel’s shares have seen an 18.9% increase this year. However, analysts suggest that while the success of the “Barbie” movie may boost toy sales, it may not have a significant impact on the company’s stock performance.
Looking ahead, Mattel remains optimistic about the rest of the year and anticipates meeting consumer demand during the upcoming holiday season. The company is confident in its ability to rebound and has reiterated its guidance based on its year-to-date performance and outlook.
Overall, Mattel’s recent earnings report reflects its resilience in the face of changing market dynamics. With an iconic brand like Barbie leading the way, the company aims to continue capturing the hearts of consumers worldwide.
