Inflation and supply chain issues are no match for the comeback kids at Mattel.
Following the completion of its turnaround efforts, Mattel Inc. scored another quarter of double-digit growth, with second quarter earnings beating estimates as net sales spiked 20% over the same period last year to hit $1.23 billion. The Q2 success was driven by big gains in select categories, including a 44% spike in global gross billings for the combined categories of action figures, building sets, games, and other toys.
“Mattel achieved another quarter of exceptional results, with double-digit growth in revenue and Adjusted EBITDA despite significant inflation,” says Mattel Chairman and CEO Ynon Kreiz. “This was the eighth consecutive quarter of increased topline performance, reflecting the strength and breadth of our portfolio, and the success in executing our strategy to grow Mattel’s IP-driven toy business and expand our entertainment offering.”
Additionally, net sales were also up 20% for the first six months of the year alongside gains in other metrics, including operating income.
“The first half of the year was an outstanding period of growth for the company,” Kreiz says. “We are benefiting from strong retail partnerships and look forward to meeting the projected increase in consumer demand for our product, as we enter the second half of the year and the all-important holiday season.”
One area of concern for Wall Street is the slight decline in gross margin, which fell to 44.4% compared to 47.5% during Q2 2021. The points lost were largely due to inflation, raw materials, supply chain costs, and increased royalty expenses for licensed toys and games. Mattel says that the declines were partially offset by adjusted pricing, favorable fixed cost absorption, and savings from its “Optimizing for Growth” program.
In North America, gross billings increased 30% versus the same period in 2021 while international gross billings rose 12%.
On a global scale, gross billings for vehicles, including Hot Wheels and Matchbox, grew 23%. Gross billings for infant, toddler, and preschool — including Fisher-Price and Thomas & Friends — grew 20%. Dolls, including Barbie and Polly Pocket grew 2%, weighed down by a 19% decline in American Girl.
Mattel is currently set up at Comic-Con International: San Diego (SDCC) where the company has a massive presence for Masters of the Universe, Hot Wheels, Jurassic World, Monster High, and more. The company continues to experience strong growth in its direct-to-consumer business via Mattel Creations and will announce the release of additional new products this weekend.
It’s already been a big week for Mattel with a flurry of announcements, including a multi-year deal with SpaceX, the launch of Forza Horizon 5: Hot Wheels for the Xbox Series X|S, and the development of a Matchbox Movie with Skydance. Earlier today, Mattel revealed the hiring of Mike Delaet as its new head of global gaming.
