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Mattel Inside Licensing

Mattel Posts Narrower Q2 Loss

07-26-2019

Mattel’s net loss narrowed to $108 million in Q2 ended June 30, from $240.9 million in the same period a year earlier, as revenue increased 2.2% to $860 million, a gain partly driven by strong sales of Barbie and Toy Story 4-licensed products.

The global action figure, building sets and games business, which include Toy Story 4, posted a 23.1% gain in revenue to $222.7 million, while the dolls category, which includes Barbie, jumped 2.5% to $273.4 million. Barbie sales increased 8.9% to $186 million, while those of Hot Wheels jumped 4.7% to $175.2 million. The building sets businesses benefitted from Mega Construx’s expansion to include new licenses for HBO’s “Game of Thrones” and Entertainment One’s “PJ Masks”.

The gains were offset by a 12.5% decline in infant and toddler toy sales (Fisher-Price, Thomas and Friends) to $252 million, while those of vehicles were down less than 1% at $214.1 million as gains with Toy Story 4 were offset by a decrease in sales of Jurassic World: Fallen Kingdom products.

As previously reported, the company is jumping into thre movie business in a big way, beginning with Masters of the Universe in 2021 as it seeks to move beyond toys into merchandise, TV, live events, music, and theme parks, company executives said.

Other planned films are based on Magic 8 Ball (Blumhouse Productions); Barbie (Warner Bros.); American Girl (MGM); Viewmaster (MGM) and Hot Wheels (Warner Bros.).

“To be successful we have to extend {IP} to other verticals,” said CEO Ynon Kreiz.

Mattel reports early success of new dolls based on the Korean K-pop group BTS, presales of which surpassed forecasts in both in the U.S. and South Korea ahead of the line’s retail launch next week, President Richard Dickson said. The company also has posted strong sales of licensed Toy Story 4-related products, with 7-inch figures being the top seller and revenue expected to continue to increase in the second half, Dickson said.

It’s also is working with Universal to turn the Jurassic World franchise into an “evergreen”, with products selling beyond the latest release. Sales of products tied to 2018’s Jurassic World: Fallen Kingdom film have “significantly beaten” the 50-60% decline in related revenue typically seen in the year following a movie’s release, Kreiz said.

Mattel continues to revamp its American Girl and Fisher-Price/Thomas and Friends business.  The Thomas and Friends series released last year on Nickelodeon has “performed OK” globally while “more work needs to be done on the content and narrative,” Dickson said.

Contact:

Mattel, Joseph Euteneur, CFO, 310-252-2000

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