Mattel has produced its biggest increase in quarterly sales in a decade as parents buy housebound children Barbie dolls, Hot Wheels cars and other toys to keep them entertained during the pandemic.
Shares in Mattel, whose other brands include Fisher-Price and American Girl, jumped 7 per cent in after-hours trading as chief executive Ynon Kreiz said the California-based company was “chasing a large, very meaningful surge”.
“When kids stay at home, parents want to keep them entertained and engaged,” he said. “We are working hard to meet this strong demand.”
Mr Kreiz added: “Parents are prioritising their spend on children, and are looking for high-quality products at affordable price points, especially with trusted brands.”
Dolls were Mattel’s best-selling category in the three months to the end of September, with sales up 22 per cent year over year to $691m, driven by Barbie.
Action figures, building sets, card games and toy vehicles also sold well, helping the company’s net revenues rise 10 per cent to $1.63bn. Net income jumped from $71m to $316m.
E-commerce drove much of Mattel’s sales growth in the quarter, with consumers still reluctant to visit stores in markets around the world. Online sales rose 50 per cent to account for about 30 per cent of the company’s sales total.
The results mark a welcome recovery for Mattel, which for years has battled for the attention of children who are spending more time watching online videos on tablets and smartphones. Competition from smaller upstart toy makers has added to the pressure.
It is also a sharp improvement from the previous quarter, when net sales dropped 15 per cent and the company reported a net loss of $109m.
Mr Kreiz argued the quarterly boost was no flash in the pan, adding that Mattel had taken market share from rivals in the period. In Europe, the Middle East and Africa, the company had grown at twice the rate of the broader toy market, while in North America it had grown at 1.4 times the rate of the industry.
“The turnaround strategy is working,” he said. “This is where our investment in purposeful play really matters.”
Popular items in the period included Barbie DreamHouse, Uno card games and Hot Wheels Ultimate Garage, as well as Baby Yoda plush toys from the Star Wars franchise.
Demand for infant, toddler and pre-school toys was weaker, down 6 per cent in the period to $404m, driven by declines in Fisher-Price and Thomas & Friends.
Investors will learn more about the health of the toy sector as it heads into the all-important holiday shopping season on Monday, when Mattel’s rival Hasbro reports earnings.