Mattel mentioned on (*20*) that its income jumped 20 % in the second quarter regardless of rising costs, a signal that customers had been persevering with to purchase Polly Pocket dolls and Mega building units regardless of rising inflation.
Revenue 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 assertion. The firm swung to a revenue of $66.4 million in 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 sturdy second-quarter earnings had been a results of the corporate’s efforts to capitalize on its mental property and increase its leisure choices, Mr. Kreiz mentioned in an interview on (*20*).
Barbie, one in every of Mattel’s largest franchises, can be featured in a live-action film starring Margot Robbie subsequent yr, and J.J. Abrams’s manufacturing firm, Bad Robot, lately signed on to make a live-action film based mostly on Mattel’s Hot Wheels line.
“We really shifted from being a manufacturing company that was making items to an I.P.-driven company that is managing franchises,” Mr. Kreiz mentioned. “Our company is now in growth mode.”
The toymaker’s earnings had been sturdy regardless of rising prices for supplies and better inflation, which rose 9.1 % in June, placing a squeeze on shoppers.
But toy gross sales are usually 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 business.
“Toys are considered a soft cyclical,” she mentioned. “They hold up really well in a recession.”
Like its fundamental rival, Hasbro, Mattel faces a new risk in a sturdy greenback. The firm mentioned its income would have been 4 proportion factors larger if not for fluctuations in international foreign money charges abroad.
“This is going to be hitting a lot of multinational companies,” Ms. Bolton Weiser mentioned. “The dollar is strengthening every day.”
Mattel maintained its steerage for income development of 8 % to 10 % for the yr, saying it will likely be capable of meet demand in the all-important vacation season.
“We are working closely with our partners to make sure there is product on shelves,” Mr. Kreiz mentioned, including that Mattel is working with its factories and third-party distributors all over the world. “A big part of our success is how we manage our supply chain.”
After falling to $7.42 in the early days of the pandemic, Mattel’s inventory value has risen steadily.