Despite a subdued second quarter, Mattel executives are riding high on the success of the Barbie movie. During the company’s second-quarter earnings call, CEO Ynon Kreiz called the film, which had 2023’s highest-grossing opening weekend so far, “a key milestone in our company’s history” and said it signaled the success of Mattel’s strategy to “capture the full value of iconic brands outside the toy aisle.”
Though Mattel’s earnings were in line with expectations, its net sales were down 12% year over year, which it attributed to softness in the toy market and retailers clearing out excess inventory. Its adjusted EBITDA was down $37 million and its adjusted gross margin of 44.9% was “comparable” to the prior year’s, CFO Anthony DiSilvestro said, and the company maintained its guidance for the year.
But Mattel execs foresee things picking up in the second half of the year, when the company experiences two-thirds of its gross billings. Toys and products tied to the Barbie movie are selling out, and the company will roll out more merch in time for holiday shopping. They expect the film to have a “halo effect” that will benefit Mattel into the near and far future, COO Richard Dickson said.
“We’ve never been more confident in Barbie and our dolls portfolio’s future in both the back half, and, certainly, years and beyond,” he said.
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Cultivating a fandom: The Barbie film has spawned an album featuring the likes of Dua Lipa and Lizzo, the show Barbie Dreamhouse Challenge on HGTV, and some 165 branded partnerships. But more than that, Kreiz said, it’s given new life to the Barbie brand.
“This was not just about making a movie,” Kreiz said. “This was about creating a cultural event, and leveraging our brands in a way that we’ve never done before.” It’s part of a broader strategy, he said, to foster deeper engagement with customers.
“The biggest shift in our strategy and in our DNA was to realize that people who buy our products are not just consumers—they are fans,” he said, and that there are more opportunities to “create value from that engagement.” The movie, he said, will serve as a “template” for executing future “comprehensive program[s] of consumer product partnerships.”
Barbie 2: Electric Boogaloo? You may want to stock up on pink paint while you still can. Kreiz hinted at the possibility of a Barbie sequel during the earnings call. “This is not just about one movie,” he said. “The goal was to build a film franchise and continue to extend the brand in more ways.”