© Reuters. ‘Barbie’ hits record box office, but Mattel’s (MAT.US) earnings struggle
Zhitong Finance APP learned that although the film “Barbie” adapted from Mattel’s (MAT.US) iconic doll became the top box office in North America last weekend with a box office of 155 million US dollars, Wall Street analysts said that do not expect this movie to have a major impact on Mattel’s recent financial performance. Mattel will report its second-quarter earnings on July 26.Analysts expect that Mattel’s Q2 revenue will fall by about 19% year-on-year to US$1 billion, and the loss per share is expected to be US$0.03.
Like other toymakers, Mattel is grappling with declining sales. Parents and retailers are stocking up on toys for kids staying home during the pandemic. And now, consumers are retrenching, retailers are still digesting excess inventory and have been cutting prices on toys.
Although Mattel has established partnerships with 100 brands from Gap to Ruggable, the company gets only a fraction of its revenue from the sale of licensed products, and the company still relies on its own toy sales to drive results.
Stifel analyst Drew Crum has a “buy” rating on Mattel and expects the movie “Barbie” to bring the company about $100 million in revenue this year, of which $75 million comes from toy sales, $13 million from product licensing, and $11 million from movies.
Goldman Sachs analyst Stephen Laszczyk noted that the adult nature of the movie “Barbie” (rated PG-13) may limit the company’s toy sales, but the movie and all the associated influence and media attention will have a “halo effect” on the Barbie brand. Analysts expect the Barbie brand’s revenue to rise 1.7 percent this year to $1.52 billion, with all the gains coming in the second half of the year. He added that Mattel’s plans to adapt other toys into films could draw on Barbie’s experience.
