Mattel mentioned on Thursday that its income jumped 20 % within the second quarter regardless of rising costs, an indication that buyers have been persevering with to purchase Polly Pocket dolls and Mega building units regardless of rising inflation.
Income for the April-through-June interval was $1.2 billion, up from $1 billion in the identical quarter final yr, the toymaker mentioned in a press release. The corporate swung to a revenue of $66.4 million within the quarter after reporting a lack of $5.5 million final yr.
After struggling for a number of years, the corporate has been in turnaround mode ever since Ynon Kreiz took over as chief govt in 2018. The robust second-quarter earnings have been a results of the corporate’s efforts to capitalize on its mental property and broaden its leisure choices, Mr. Kreiz mentioned in an interview on Thursday.
Barbie, one in all Mattel’s largest franchises, will probably be featured in a live-action film starring Margot Robbie subsequent yr, and J.J. Abrams’s manufacturing firm, Unhealthy Robotic, just lately signed on to make a live-action film primarily based on Mattel’s Scorching Wheels line.
“We actually shifted from being a producing firm that was making objects to an I.P.-driven firm that’s managing franchises,” Mr. Kreiz mentioned. “Our firm is now in progress mode.”
The toymaker’s earnings have been robust regardless of rising prices for supplies and better inflation, which rose 9.1 % in June, placing a squeeze on customers.
However toy gross sales are typically resilient in downtimes as a result of dad and mom don’t need to disappoint their kids, mentioned Linda Bolton Weiser, an analyst with D.A. Davidson who covers the toy trade.
“Toys are thought of a gentle cyclical,” she mentioned. “They maintain up rather well in a recession.”
Like its major rival, Hasbro, Mattel faces a brand new risk in a powerful greenback. The corporate mentioned its income would have been 4 proportion factors greater if not for fluctuations in international forex charges abroad.
“That is going to be hitting numerous multinational firms,” Ms. Bolton Weiser mentioned. “The greenback is strengthening day-after-day.”
Mattel maintained its steering for income progress of 8 % to 10 % for the yr, saying it will likely be in a position to meet demand within the all-important vacation season.
“We’re working intently with our companions to verify there’s product on cabinets,” Mr. Kreiz mentioned, including that Mattel is working with its factories and third-party distributors world wide. “A giant a part of our success is how we handle our provide chain.”
After falling to $7.42 within the early days of the pandemic, Mattel’s inventory worth has risen steadily.
