Mattel Gains as Barbie’s Comeback Takes Hold With Robust Growthby
Iconic doll line’s sales increase 23 percent in second quarter
Performance helps company post smaller-than-estimated loss
Barbie is back.
The doll brand’s sales rose 23 percent in the second quarter, helping Mattel Inc.’s revenue top analysts’ estimates and propelling the shares as much as 3.2 percent higher on Thursday.
Such a strong performance for Mattel’s biggest brand would have been difficult to predict last year, when Barbie was losing market share to competitors like Disney Princess and Frozen dolls. President Richard Dickson has turned around the 57-year-old property by making it more relevant to today’s girls and moms, with marketing focused on female empowerment and new models featuring curvier hips and shorter legs.
“The entire Mattel organization took on the challenge to reset this storied brand and have made tremendous strides in a very short period of time,” Dickson said Wednesday on a conference call to discuss the results.
Mattel posted second-quarter revenue of $957.3 million, according to a statement Wednesday after the market closed. That topped analysts’ $936.7 million average projection. Shares of the El Segundo, California-based company climbed as high as $33.89 Thursday, the biggest intraday gain in three weeks.
Barbie’s comeback has helped Mattel overcome the loss of the Disney Princess and Frozen licenses, which shifted to Hasbro Inc. this year. Mattel said those licenses accounted for 7 percent of sales in 2015, or about $440 million. With those departures, revenue from Mattel’s non-Barbie girls brands plummeted 60 percent last quarter. Barbie made up about 15 percent of Mattel’s revenue last year, even as the brand’s sales fell 10 percent to $905.9 million.
Even with Barbie’s recent rebound, the company reiterated Wednesday that it expects sales to be little changed this year, excluding the effects of foreign-currency exchange-rate fluctuations.
Mattel’s loss last quarter was 2 cents a share.. Analysts estimated a loss of 5 cents, on average.
When Dickson returned to Mattel in the middle of 2014, his top priority was reviving Barbie. Giving him confidence was that in an earlier stint at the company he had overseen a brief uptick in the brand’s results and then left in 2010 for a high-ranking job at Jones Group Inc. Barbie has now increased sales twice in the past three quarters.
“The strength of the Barbie brand is its renewed positioning, the additional marketing and merchandising and execution that we’ve done to get that brand to be more culturally relevant,” Dickson said. “We’re feeling confident.”