Mattel reported sales and profit that beat analysts’ expectations but it did not get much help from Barbie, the fashion doll that was the focus of the top movie in the world last weekend.

Mattel’s sales fell 12 per cent to US$1.1 billion in the second quarter, the El Segundo, California-based toy giant said on Wednesday (Aug 2), beating analysts projections for a slightly steeper drop. Adjusted earnings, at 10 US cents a share, were also ahead of forecasts.

An increase in sales of toy vehicles, such as Hot Wheels, helped offset declines in pre-school and action figures, the company said. The doll division’s billings rose 10 per cent, thanks to its Disney Princess and Monster High brands. Sales of Barbie fell.

Barbie revenue was in line with company forecasts and is expected to increase in the coming months, chief executive officer Ynon Kreiz said in an interview.

“We do expect Barbie to grow in the second half of the year and perform well, and it’s important to remind everyone that Barbie has been a very strong brand coming into this,” Kreiz said.

Earlier on Wednesday, Gap announced that Richard Dickson, the Mattel chief operating officer who oversaw a recent turnaround of Barbie, will become CEO of the clothing company next month.

GET BT IN YOUR INBOX DAILY

Start and end each day with the latest news stories and analyses delivered straight to your inbox.

Sign UpVIEW ALL

Sales of the doll were at a recent peak amid the pandemic, with parents stocking up on toys for kids in lockdown. Toymakers including Mattel and rival Hasbro, which reports results next week, have since been wrestling with a stockpile of unsold products at retailers. 

Inventory levels in the toy industry were down by double-digits in US dollar terms in the second quarter from the first quarter, which suggests the worst of it is over, Kreiz said. Mattel reiterated its forecast for flat sales in 2023 and a slightly lower profit in the US$1.10 to US$1.20 per share range.

Barbie, the movie from Warner Bros Discovery, generated over US$356 million in ticket sales globally in its opening weekend. Kreiz said the success of the picture underscores his company’s ability to work with creative talent and promote its brands.

The film will generate more demand for Mattel’s dolls as well as movie-related merchandise, with some product lines already selling out, Kreiz said. Mattel also delayed some Barbie-related promotions until after the release of the film, which will benefit the brand in the third quarter, he said.

Kreiz, who has been CEO since 2018, is seeking to transform Mattel into a Hollywood producer of films and TV shows based on the company’s intellectual property. Barbie, directed by Greta Gerwig and co-produced with Warner Bros, is the first of several theatrical movies Mattel is partnering with studios to release in the coming years. Bloomberg