The company has reported a surprise jump in quarterly revenue.
In the third quarter, net sales increased 3% to $1.48b compared to $1.44b in 2018, while operating loss decreased to $28.3m versus a loss of $339m last year.
Worldwide Barbie gross sales rose 10% to $412.8m in the third quarter; analysts had expected a 1.2% drop on fears that demand would ease in the run-up to the release of the Disney’s Frozen II. Mattel’s international gross sales rose 10% to $721.7m lifted by sales of dolls based on Korean boy band BTS, which has dominated international music charts. Mattel secured the rights for dolls based on the seven-member band earlier this year. BTS and Barbie, which has been modernised with variants of based on popular celebrities, role models, different skin tones and professions, helped lift worldwide doll sales by 5%.
Elsewhere in Mattel’s portfolio, Hot Wheels pulled off an impressive display with a 25% increase on last year. The US toymaker’s shares rose nearly 20% in extended trading.
“The story around BTS shows how we’re able to capture cultural trends and commercialise them,” chief executive officer Ynon Kreiz told Reuters.
Mattel said it was not seeing any cancellations by its retail partners ahead of a 15th December US tariff deadline on Chinese toy imports. “At this stage, we are not seeing any impact from tariffs and we don’t expect anything this year,” Ynon added, noting that consumer sentiment is strong as the company heads into the crucial holiday season.
Mattel also disclosed material weaknesses in its internal control over financial reporting, and said chief financial officer Joseph Euteneuer will leave the company. The disclosure was a result of an investigation by the company into an anonymous whistleblower letter that was made public in August. The investigation found that income tax expenses were misstated in the third and fourth quarters of 2017, and while there was no impact on full-year financials, the error was not reported to then-CEO Margaret Georgiadis. Mattel cancelled a debt sale in August after receiving the letter.