The iconic toy company is manufacturing more than usual to avoid product shortages. Its classic toys are thriving in the absence of new movie franchises.
November 02, 2020
Mattel Inc. has announced the rise in its sales as much as 13% after third-quarter results have surpassed expectations, as a great number of parents have been buying Barbie dolls and Hot Wheels toys during the pandemic.
The company’s doll sales have surged to 22% compared with the previous year, as families have been looking for ways to entertain their children amid the lockdown period. Revenue rose 10% to USD 1.63 billion in the period, Mattel said on Thursday, topping analysts’ predictions of USD 1.46.
Besides the impact of parents assuaging restless kids, the lack of new movie franchises tied to competing toy brands may provide a further boost to Mattel. The company’s sales are dependent on time-honored brands such as Barbie, Uno, and Pictionary.
Mattel also said it expects sales in 2020 overall to be roughly flat compared with last year, but its adjusted profit margin should rise to as high as 49%.
The El Segundo, California-based company is looking to get more money from its intellectual property rights, rather than just relying on product sales. It has 10 films in development but hasn’t set release dates for any of its movies.
Mattel withdrew its 2020 guidance earlier in the year due to uncertainty over the coronavirus, which affected both the production of new products and demand. The company did say in July it expects sales to improve in the second half of the year after they fell 14% year-over-year during the first six months of 2020, and see run-rate cost savings of USD 1 billion.