Mattel saw its toy sales and earnings tumble during the fourth quarter as its best known brand, Barbie, is set for a Hollywood movie adaptation that stars Margot Robbie.
During the fourth quarter, Mattel posted overall revenues from holiday season sales at $1.4 billion, which was down 22 percent from a year-earlier $1.79 billion and a miss on an analyst estimate of $1.68 billion revenue. Mattel also saw net income tumble to $16.1 million, compared to $225.8 million in 2021, and the adjusted earnings per-share came to 18 cents, against a year-earlier 53 cents, and another miss on a 29 cents consensus among analysts for the latest quarter.
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“Our fourth quarter results were below our expectations, as the macro-economic environment was more challenging than anticipated,” Ynon Kreiz, chairman and CEO of Mattel, said in a statement after missing on Wall Street expectations on Wednesday.
“We believe we are well-positioned to continue executing our multi-year strategy to grow our IP-driven toy business and expand our entertainment offering,” he added. And during an analyst call, Kreiz said Mattel expects point-of-sale toy growth in 2023, despite market headwinds.
“Given continuing macro-economic headwinds and market volatility that may impact consumer demand, we expect the (toy) industry to be flat to slightly up in 2023,” he said. Against that backdrop, Mattel said it had raised its expected 2023 cost savings to $300 million, from a previously targeted $250 million.
Barbie, set to hit theaters on July 21, 2023, represents the first time the Mattel toy has been rendered as a live-action movie. The film will be directed by Greta Gerwig (Lady Bird) from a script by Gerwig and Noah Baumbach (Marriage Story, White Noise) and has a sprawling supporting cast that includes Ryan Gosling, America Ferrera, Kate McKinnon, Ariana Greenblatt, Alexandra Shipp, Emma Mackey, Kingsley Ben-Adir, Issa Rae, Michael Cera, Rhea Perlman, Will Ferrell and Nicola Coughlan.
Kreiz said Warner Bros.’s Barbie was in post-production ahead of its summer release. Mattel Films has also partnered with Skydance for a live-action movie based on its Matchbox toy vehicle line, to be directed by David Coggeshall. And the toy maker has pacted with J.J. Abrams’ Bad Robot to produce a Hot Wheels movie with Warner Bros.
Stock in Mattel fell by $2.00, or almost 10 percent, to $18.50 as investors reacted to falling profitability for the consumer-facing toy maker and weaker than expected guidance.
