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'Toy Story 4' delivers surprise revenue rise for Mattel

A screen grab from the teaser of 'Toy Story 4'. Photograph:( WION Web Team )

Reuters Delhi Jul 26, 2019, 07.33 AM (IST)

Mattel Inc reported a surprise rise in quarterly revenue on Thursday, as the success of the latest 'Toy Story' movie boosted demand for its action figures and a makeover of Barbie lifted sales of the iconic dolls, sending its shares up 5%. 

The toymaker also achieved its full-year cost savings target six months ahead of schedule and posted a much smaller loss, as the company benefits from making toys modelled on big Hollywood titles and revitalizing the 60-year-old Barbie brand with variants based on popular celebrities and role models. 

Worldwide sales in the action figures, building sets and games segment jumped over 20% in the second quarter, while they rose about 9% in the Barbie unit.

'Toy Story 4' circles around a group of toys, voiced by Hollywood A-listers Tom Hanks and Tim Allen, has made over $860 million worldwide.

Mattel is working to become the "partner of choice" for more entertainment companies, Chief Executive Officer Ynon Kreiz told Reuters. 

"Historically, it wasn`t an area we were focused on but going forward we are looking to do more. The success of `Toy Story` is an example of our capabilities," he said. 

Mattel`s rival Hasbro Inc earlier this week also beat quarterly profit and sales estimates on demand for action toys based on 'Avengers: Endgame', reflecting the toy industry`s shift away from developing new original properties to chasing big entertainment titles to grab kids` attention. 

The company`s second-quarter revenue rose 2.3% to $860.1 million, while analysts` on average had estimated a 3.3% drop.
Gross sales in North America increased 1% to $447.4 million, also beating analysts` estimates.

The company exceeded its savings target for the year, achieving $754 million in the first six months, compared with its initial target of at least $650 million.

Mattel said it expects to achieve another $100 million in savings by the end of 2019.

The company`s loss narrowed to $108 million, or 31 cents per share, in the three months ended June 30, from $240.9 million or 70 cents per share, a year earlier.

On an adjusted basis, Mattel reported a loss of 25 cents per share. Analysts had expected a loss of 40 cents per share, but it was not immediately clear if the figures were comparable.

Story highlights

'Toy Story 4' circles around a group of toys, voiced by Hollywood A-listers Tom Hanks and Tim Allen, has made over $860 million worldwide.