Barbie’s Influence on Mattel’s Earnings

by webmaster

As toy maker Mattel (ticker: MAT) gears up to announce its quarterly earnings, all eyes are on one of its most popular brands: Barbie.

The hype surrounding the Barbie movie has not only bolstered the stock but also rekindled consumer excitement for the iconic doll. However, analysts caution that the financial impact of the Barbie tie-in for Mattel may take some time to manifest in the numbers.

In Mattel’s foray into summer movie blockbusters, the Barbie film exceeded expectations. The movie recorded an impressive $162 million in domestic box office sales during its opening weekend, making it the highest-grossing weekend for theaters since 2019, according to Comscore. This impressive debut contributed to an 18% surge in Mattel’s stock this month.

While the revenue generated from various Barbie movie licensing partnerships is expected to be a significant financial boon for Mattel, analysts predict that these royalties won’t be reflected in the company’s reports for at least another quarter. UBS analyst Arpiné Kocharyan explains that the benefits of direct sell-through of the product are more immediate compared to the royalties garnered from licensing deals.

Although Mattel has not disclosed whether it will earn direct revenue from Barbie’s box office success through partnerships with Warner Bros., analysts concur that the company will enjoy high profit margins from brand licensing agreements and an uptick in Barbie toy sales. However, they differ on whether this boost will materialize in the third or fourth quarter.

The PG-13 Barbie film, produced by Warner Bros. Discovery (WBD), specifically targets an adult audience and aims to reignite their fondness for Barbie and its accessories. However, Goldman Sachs analyst Stephen Laszczyk suggests that many of these adults may choose to purchase the doll on special occasions only.

As Mattel prepares to unveil its quarterly earnings, the influence of Barbie on the company’s financial performance is eagerly anticipated. While the impact of the Barbie movie may take some time to fully materialize, there is no doubt that Barbie continues to captivate consumers and drive excitement for Mattel.

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Opening Up Opportunities for Mattel

Analysts surveyed by FactSet are predicting that Mattel will experience a decline in revenue for the second quarter of this year, marking a 19.4% drop compared to the same period in 2022. However, there is a silver lining as this forecasted revenue is actually an increase compared to the first quarter of 2023.

In contrast to the second quarter of last year, Mattel is expected to report an adjusted loss per share of 3 cents instead of earnings of 18 cents a share. Despite this challenging outlook, analysts remain optimistic about Mattel’s potential to capitalize on the cultural impact of its beloved franchise, Barbie.

Out of the 11 analysts surveyed by FactSet, nine have given a Buy rating for Mattel, while two have a Hold rating. D.A. Davidson’s Linda Bolton Weiser believes that the success of the upcoming Barbie movie will enhance the company’s credibility in the media industry. Although the box office performance of the film may not have a significant impact on Mattel’s second quarter results, it will certainly be a topic of discussion among executives.

While Mattel is actively exploring opportunities to leverage its other popular intellectual properties, such as Polly Pockets and Hot Wheels, by developing 14 films based on these brands, the release date for most of these movies is yet to be determined. However, the first of these films, Hot Wheels, is scheduled for release in December 2025.

Jaime Katz, an analyst at Morningstar, emphasizes the importance for Mattel to disclose its plans for progressing its film lineup if it hopes to capitalize on the success of the Barbie movie in the future. With the momentum and visibility that Mattel currently enjoys through brand partnerships and the Barbie movie, stakeholders are eager to know what new content-driven ideas are on the horizon.

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