The company beat Wall Street estimates for quarterly revenue on Thursday.
As reported by Reuters, Mattel has posted a strong set of quarterly results, as a more diverse range of Barbie dolls and new toys based on franchises powered sales in the United States. Shares rose 11% after hours following the news.
Mattel’s revenue uplift, along with Hasbro’s surprise quarterly profit earlier this week, also signals that toy companies may have put behind them the demise of Toys R Us.
“We’ve moved on past Toys R Us,” Mattel chief executive Officer Ynon Kreiz told Reuters, adding that the company was benefiting from its expanded partnerships with other retailers, ranging from grocers to drug stores.
A makeover of Mattel’s 60-year-old Barbie brand with new skin tones and professions, and a focus on toys based on big Hollywood franchises such as Toy Story and Jurassic World, highlight the company’s efforts to connect with changing preferences of a new generation of kids.
Under Ynon, who once headed TV production house Endemol Group, Mattel is relying more on big third party entertainment franchises to create future growth. Mattel executives on an earnings call said the company was ‘extremely bullish’ on the Toy Story franchise as the latest instalment hits theatres in June.
Gross sales of Barbie rose 7% in the first quarter, the sixth straight quarter of growth. Mattel’s doll sales are expected to get a boost from an upcoming line based on the hugely popular Korean boy band BTS, as the company looks to tap into the K-pop craze among teens in the United States.
The company posted a smaller-than-expected 2.7% decline in total sales to $689.2m, buoyed by a surprise rise in sales in North America. Analysts had expected a near 13% drop in the first-quarter revenue, according to IBES data from Refinitiv.
Excluding certain items, the company recorded a loss of 44 cents per share, smaller than the 56 cents analysts had expected. The company’s shares were trading at $13.62.