July 23, 2024

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Barbie Movie Helps Mattel Achieve First Sales Growth in a Year

For years, the head of toymaker Mattel has emphasised the role of movies in reinvigorating the company’s sales. The latest financial results have demonstrated just how vital this help has become.

In the period from July to September 2023, Barbie saw a 16% increase in billings compared to the same period in 2022, driven by the success of the first-ever film starring the iconic doll. This substantial gain marked a significant turnaround, leading to the company’s first quarter of sales growth in a year.

However, despite the stronger-than-expected performance, Mattel has chosen to maintain its Christmas sales forecast, recognising the limitations of the Barbie boost and expressing concerns that economic challenges, including inflation, could dampen consumer demand.

In recent years, Mattel’s CEO, Ynon Kreiz, has been advocating for investments in films and television shows as a means to revitalise growth within the company, an industry that has been lacklustre since the pandemic surge.

Kreiz anticipates that this year will be no exception, with sales in the industry likely to fall compared to 2022. Nonetheless, he emphasised that Mattel is faring well under these conditions, effectively competing with rivals and enhancing profit margins.

The Barbie movie, directed by Greta Gerwig and featuring Margot Robbie and Ryan Gosling, has become the top-grossing film of the year, generating over $1.4 billion in global ticket sales. Its primary objective was to reignite interest in the Barbie brand, which experienced declining billings in the first half of the year. Mattel expects a boost of approximately $125 million from the movie, with a significant portion of it already realized.

Besides Barbie, other Mattel brands like Trolls, Barney, Hot Wheels, and Polly Pocket are set to appear in upcoming Hollywood films.

Overall, Mattel reported a 9% increase in sales for the third quarter compared to 2022, amounting to $1.9 billion. This marks the first quarter of growth since the previous year. However, profits dipped significantly to $146.3 million, primarily due to an increase in expected taxes compared to the previous year. Following this announcement, Mattel’s shares fell more than 6% in after-hours trading.