Mattel is stocking up in anticipation of increased demand for Jurassic World action figures and Hot Wheels cars this holiday season, citing a 20% increase in second-quarter revenue as proof inflation hasn’t deterred parents to spend on toys.
The California-based company behind Barbie dolls and Thomas & Friends trains said its adjusted operating profit jumped 82% to $121 million in the three months to June, despite higher costs for materials, shipping and wages.
Gross billings for action figures rose nearly 50% before currency effects, driven by Jurassic World and Lightyear films, but sales of its American Girl dolls fell 19%. Ynon Kreiz, chief executive, said Mattel “sees a certain softness” in the demand for more expensive toys.
While net sales of $1.24 billion were up 24% before currency effects, Mattel increased inventory by 43% to about $360 million. Kreiz said the higher inventories were appropriate for the demand he had seen from consumers and retailers who placed orders earlier than usual to avoid a repeat of the year’s supply chain delays. last.
“The big picture is that parents will always prioritize the money spent on their children. Retailers see the industry as a strategic priority for them in terms of experiential shopping, engagement, foot traffic, etc,” he said in an interview.
Mattel saw some improvement in commodity inflation and logistics, Kreiz said, and its own supply chains were working well.
The revenue came a day after Mattel’s Matchbox brand struck a deal with Elon Musk’s SpaceX to produce a range of rocket-themed toys and collectibles. “It’s really about Mattel expanding our portfolio . . . and being able to bring new partners into the toy aisle,” Kreiz said.