Mattel has seen its biggest increase in quarterly sales in a decade, fueled by a surge in Barbie and Hot Wheels toys bought by parents and families throughout a period of at home play driven by the global lockdown, the toy maker revealed in its latest earnings report.
Net sales rose 10 per cent for the third quarter versus the same period for the year prior, while gross sales were up ten per cent as reported in what Ynon Kreiz, chairman and CEO of Mattel has stated was a “very strong quarter for Mattel.”
“We saw a major upswing in topline and a significant increase in profitability as we continued to make meaningful progress towards becoming an IP-driven, high-performing toy company,” he said in his Q3 earnings statement. “The toy industry, as a whole, grew significantly and continues to demonstrate its resilience in challenging economic times.
“Mattel’s growth outpaced the industry as we gained share in key markets around the world and achieved growth in each of our four regions.”
Kreiz stated that based no the POS momentum the firm is now seeing, as well as low retail inventories and the early start of the Christmas shopping season, Mattel is expecting to see net sales and gross sales continue to grow in the fourth quarter of 2020.
“Looking to the full year, with continued operational savings and margin expansion, we expect to see strong Net Income and EBITDA growth and remain focused on creating long-term shareholder value,” he added.
The world’s response to the pandemic has fueled an upsurge in toy spend this year, reflected in the growth of sales of Mattel’s own key brands, Barbie and Hot Wheels, with demand still continuing as we move into the key shopping period of the year.
“When kids stay at home, parents want to keep them entertained and engaged,” said Kreiz. “We are working hard to meet this strong demand. Parents are prioritising their spend on children, and are looking for high-quality products at affordable price points, especially with trusted brands.”
Dolls were Mattel’s best-selling category in the three months to the end of September, with sales up 22 per cent year over year to $691m, driven by Barbie. Action figures, building sets, card games and toy vehicles also sold well, helping the company’s net revenues rise 10 per cent to $1.63bn.
Net income jumped from $71m to $316m. E-commerce drove much of Mattel’s sales growth in the quarter while online sales rose 50 per cent to account for about 30 per cent of the company’s sales total.
Mattel’s third quarter results show a sharp improvement from the previous quarter, when net sales dropped 15 per cent and the company reported a net loss of $109m. Mr Kreiz argued that Mattel had taken market share from rivals in the period.
The Financial Times reports that in Europe, the Middle East and Africa, the company had grown at twice the rate of the broader toy market, while in North America it had grown at 1.4 times the rate of the industry.
“The turnaround strategy is working,” said Kreiz. “This is where our investment in purposeful play really matters.”
Popular items in the period included Barbie DreamHouse, Uno card games and Hot Wheels Ultimate Garage, as well as Baby Yoda plush toys from the Star Wars franchise.
for infant, toddler and pre-school toys was weaker, down six per cent in the period to $404m, driven by declines in Fisher-Price and Thomas & Friends.