The Hot Wheels are revved up, Barbie is headed to the big screen, and the Power of Grayskull is back in a big way as Mattel reported double-digit growth in the first quarter of 2022.
The global toy and entertainment company says that sales spiked 19% in the first three months of the year as it defeated supply chain issues and inflation to chart net sales of $1.04 billion for the quarter. Mattel’s operating income spiked 136% over the same period last year to $80 million while its adjusted EBITDA hit $152 million, a 65% increase.
“Mattel achieved its highest first quarter results we have on record for net sales, operating income, and EBITDA. Our strong performance continued, with growth across regions, categories, and our three power brands,” says Mattel Chairman and CEO Ynon Kreiz. “These results are in line with our strategy to grow Mattel’s IP-driven toy business.”
Back in February, Mattel revealed that 2021 was a banner year for the company as Kreiz declared its turnaround complete. Now, as the company moves forward in growth mode, the previously announced guidance for 2022 and goals for 2023 remain intact. The company is placing short-term focus on keeping new products flowing into retailers while stocking up for the holidays and prepping for the return of licensed business now that theaters are open and tie-in products are back in sync.
“Mattel’s supply chain is playing a key role in our success. All of our factories are fully operational, and we are working with our retail partners to ensure product is available on shelves to meet consumer demand,” Kreiz says.
Growth in Net Sales, Gross Billings
In North America, net sales for toys grew 26% versus Q1 2021 alongside a 25% spike in gross billings for new product shipments. Growth was achieved across nearly all categories, with Hot Wheels, Barbie, Jurassic World, Lightyear, MEGA, Fisher-Price, Thomas & Friends, and Polly Pocket called out as top brands in Q1. One notable drop came from American Girl, which declined 22% versus the same period last year.
Both net sales and gross billings in the international markets spiked 16%, a welcome number given current challenges across Europe and Asia. Worldwide gross billings for dolls were up 4% while infant, toddler, and preschool saw a 12% spike. Vehicles powered up a 31% gain in gross billings while the combined category of action figures, building sets, games, and other spiked 41%.
Looking ahead, Mattel expects net sales to grow 8-10% in 2022 as a whole.
A Big Week for Mattel News
Ahead of today’s earnings report, Mattel revealed a new goal to reduce plastic packaging by 25% per product by 2030. The news came with the release of the company’s 2021 Citizenship Report which provides a progress update on its Environmental, Social, and Governance (ESG) strategy and established goals. The full report can be viewed here.
Earlier this week, Mattel Films enlisted J.J. Abrams’ Bad Robot Productions to produce the long-awaited Hot Wheels movie for Warner Bros. Pictures. The news preceded a first-look photo of Margot Robbie as Barbie from the set of that film, which is set to hit theaters on July 21, 2023.
Additionally, Mattel teamed up with Gamefam to bring He-Man and the Masters of the Universe into the metaverse with You Have the Power! —an original game experience that lives within Roblox — and launched a new Fisher-Price Happy World collection exclusively at Target.
The big news week and positive earnings results were also met with rumblings of buyout talks. According to the Wall Street Journal, informal talks have been held with private equity firms that may be interested in a takeover bid. While Mattel has yet to comment publicly on the rumors, it is possible that they may be addressed when the company holds its Q1 earnings call this afternoon.
