Toy demand helps Mattel beat earnings estimates

Third- quarter revenue was $ 1.63B, topping predictions of $ 1.46B.

Mattel shares rose asmuch as 10.6% in midday trading Friday after third- quarter results shattered expectations, lifted by consumers snapping up Barbie dolls and Hot Wheels toys during the pandemic.

Revenue rose 10% to $ 1.63 billion in the period, Mattel said Thursday, topping analysts’ predictions of $ 1.46 billion. Adjusted profit was 95 cents a share, crushing estimates of 39 cents, as the company continued to work on cutting costs.

Mattel has addressed inventory problems posed by the coronavirus and expects a stronger-than- normal holiday buying season, Chief Executive Officer Ynon Kreiz said in an interview. The company said inventories at retail outlets were lower than at the same time last year, and they’re working together to avoid product shortages.

The lack of new movie franchises tied to competing toy brands may provide a boost to Mattel, which relies on wellknown products such as Barbie, Uno and Pictionary. The company’s doll sales surged 22% compared with a year earlier, as families looked for cheap ways to entertain kids during lockdowns.

Mattel also said it expects sales in 2020 overall to be roughly flat compared with last year, but its adjusted profit margin should rise to as high as 49%.

The El Segundo, Californiabased company is looking to get more money fromits intellectualproperty rights, rather than just relying on product sales. It has 10 films in development but hasn’t set release dates for any of its movies.

COURTESY Sales of Barbie dolls andHot Wheels toys helpedMattel smash third- quarter estimates.