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RECOVERY

Dolls Help Drive Mattel Quarterly Revenue up 10% over Last Year

US toy giant Mattel reported a sterling quarter with revenues increasing by 10 per cent over the same period last year, despite challenges posed by COVID-19, and driven by a strong IP licensing portfolio.

Mattel says the company’s net sales in North America increased 13 per cent over the prior year’s quarter, primarily driven by growth in dolls, action figures building sets, games, and ‘other’, which includes products like plush toys, card games, Pictionary, and toy vehicles.

The gains were partially offset by declining revenues in the Infant, Toddler and Pre-School segment, which includes Fisher Price and Thomas and Friends.

The international market saw Mattel post gains of eight per cent for net sales, with all segments other than the Infant, Toddler and Pre-school segment seeing growth.

Strong IP licensing was credited for much of the company’s success in regaining profitability.

““This was a very strong quarter for Mattel,” said CEO Ynon Kreiz. “We saw a major upswing in topline and a significant increase in profitability as we continued to make meaningful progress towards becoming an IP-driven, high-performing toy company. The toy industry, as a whole, grew significantly and continues to demonstrate its resilience in challenging economic times. Mattel’s growth outpaced the industry as we gained share in key markets around the world and achieved growth in each of our four regions.”

Mattel has focused heavily on licensing agreements over the past two years, announcing agreements with Warner Brothers for DC Comics characters; with Disney for properties like Toy Story, Coco, Finding Nemo, The Incredibles and upcoming movies like the Onward; and even with the South Korean K-Pop band BTS.

While Mattel struggled in the first nine months of the year with the impact of COVID-19, the company says its strong IP portfolio and the work it’s done on securing the supply chain and with retail partners is paying off as Mattel posts an impressive recovery going into the Christmas season.

Mattel is working closely with its retail partners on the challenge of meeting consumer demand heading into the holiday season and is mindful of the COVID-19 volatility and other macro-economic uncertainties, which could negatively impact performance,” the company said in an Oct. 22, 2020 statement. “Mattel’s supply chain is fully operational as we chase the extraordinary growth in consumer demand for our products.”

Kreiz added that Christmas sales are looking bright. “Based on the POS momentum we are seeing, the low retail inventories and the early start of the holiday shopping season, we expect Net Sales and Gross Sales to grow in the fourth quarter,” he said.

“Looking to the full year, with continued operational savings and margin expansion, we expect to see strong Net Income and EBITDA growth and remain focused on creating long-term shareholder value.”

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