Mattel has reported its second quarter 2020 financial results. Thanks to a strong performance of Barbie and UNO, the company posted results that exceeded expectations amid the pandemic, which in turn saw its share price rise by four per cent on the Thursday (23 July 2020).
This increase in share price came despite overall sales falling by 15 per cent in the second quarter, versus the prior year’s second quarter.
Looking at how the different categories performed, Mattel reported growth for Barbie in the second quarter. However, this was not quite enough to bring the company’s doll category into growth; worldwide sales in Mattel’s doll category fell by five per cent in the second quarter compared with last year. Sales of infant, toddler, and pre-school products was down by 21 per cent. And sales of the company’s vehicle category also fell by 26 per cent. Meanwhile, the growth of card games, including UNO, and Star Wars: The Child plush, helped to partially offset decline in the action figures, building sets, games, and ‘other’ categories, which were down by 12 per cent for the second quarter, compared with last year.
Ynon Kreiz, chairman and CEO of Mattel, said: “We entered the second quarter with extensive retail closures and distribution challenges and had to absorb a full quarter of Covid-19 impact, but we demonstrated our execution capabilities and the resilience of our brands. While revenues were down, they exceeded our expectations, particularly in North America, Barbie, and games, where we saw sales increases. Total company POS improved significantly and was positive in the quarter, and e-commerce continued to grow strongly in all regions.”
Mr. Kreiz continued: “Based on the momentum we are seeing, the positive POS trends, and low retail inventories exiting the quarter, we are planning for strong demand for our products in expectation of an improved revenue performance in the second half compared to the first half, including the all-important holiday season.”
Joseph Euteneuer, CFO of Mattel, said: “The work we have done to reshape our operations over the past two years has improved our cost structure, financial flexibility and liquidity. We continued to see significant improvement in gross margin with our highest second quarter gross margin since 2016. We are encouraged by the significant progress we have made to reshape our organisation, restore profitability and position the company for sustainable growth.”