Mattel Inc. on Wednesday reported second-quarter results that beat estimates, but the toy maker held to its full-year outlook as the “Barbie” movie’s blowout debut weekend clashed with continued muted demand for toys.
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reported second-quarter net income of $27 million, or 8 cents a share, compared with $66 million, or 18 cents a share, in the same quarter last year. Revenue fell 12% to $1.09 billion, compared with $1.24 billion in the prior-year quarter.
Read more: Mattel says it wasn’t just making a ‘Barbie’ movie, it was laying the groundwork for a film franchise
Adjusted for severance and restructuring costs and the effects of the recall of an infant incline-sleeper product, Mattel earned 10 cents a share.
Analysts polled by FactSet expected Mattel to report an adjusted per-share loss of 3 cents on sales of $1 billion.
For the full year, Mattel said it still expected adjusted earnings per share of between $1.10 and $1.20, when factoring out currency fluctuations.
Chief Financial Officer Anthony DiSilvestro said in a statement that retailers were still cautious about filling their stockrooms with more toys. But he said stores’ efforts to clear out that inventory pileup — which occurred after higher prices for basics led to less demand for things like toys, clothes and electronics — were largely in the rearview mirror.
“While comparisons improved from the first quarter, our second-quarter financial results were negatively impacted as retailers continued to manage inventory levels and by some overall industry softness,” he said.
“At this point, we believe the retail inventory correction is mostly behind us, and we look forward to meeting consumer demand for our product as we enter the second half of the year and all-important holiday season,” he continued. “Given our year-to-date performance and outlook for the balance of the year, we are reiterating our guidance.”
Shares fell 1.8% in after-hours trading.
Mattel, which makes Barbie dolls, reported earnings Wednesday — after the debut Friday of the “Barbie” movie, which was produced by Warner Bros. Discovery Inc.
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and raked in $155 million domestically and $182 million outside the U.S. over the weekend. The film — directed by Greta Gerwig and starring Margot Robbie and Ryan Gosling — had one of the biggest box-office weekends ever.
Mattel Chief Executive Ynon Kreiz said “Barbie” was Mattel’s “first ever major theatrical film” and that the film was “a showcase for the cultural resonance” of the company’s intellectual-property cache of dolls and action figures.
Barbie is already Mattel’s most profitable franchise. But while customers bought lots of toys during the pandemic as an antidote to boredom, demand has been more sluggish since then. And inflation has forced more consumers to spend the money they have on necessities. At the beginning of the year, Mattel rival Hasbro Inc. announced plans to cut 15% of its workforce.
Shares of Mattel are up 18.9% so far this year. But with investors already expecting a rebound for the company in the second half of 2023, some analysts said that while “Barbie” might help Mattel’s toy sales, it might not do much more for the stock.
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