Toy giant Mattel said its performance has been largely unimpeded by supply chain issues that have plagued nearly every company for months, saying it is well prepared to provide consumers with enough toys to put under the Christmas tree this year.
In the third quarter, Chairman and CEO Ynon Kreiz said, the California-based children’s entertainment company was successful in working through supply chain disruptions, particularly because the company owns its manufacturing facilities, a competitive advantage in terms of cost.
“It’s not that we were not impacted,” he told investors and analysts on a conference call. “But we did anticipate short supply and longer lead times and factor that into our planning.”
Kreiz added that the fourth quarter, which began Oct. 1, is off to a good start, and the company expects full-year net sales to increase by approximately 15% year over year.
“This is really where our scale, expertise and flexible supply chain, all the work we’ve done over the last three years is working to our advantage,” he said. “And we are ready for a strong holiday season and will do what we can to meet the strong demand.”
Related: Supply Chains Could Be The Grinch That Steals Retail’s 2021 Holiday Season
Mattel said net sales in the third quarter were up 7% compared to the same period in 2020, to $1.8 billion the fifth consecutive quarter of year-over-year growth. Kreiz noted that eCommerce sales now account for 25% of the toy brand’s total sales.
Dolls, by far Mattel’s largest category, grew by 3%, to $720 million of worldwide gross billings, the company said, while toy vehicles grew by 5%, to $390 million, and action figures, building sets, and games grew by 25%, to $446 million. Infant, toddler and preschool toys saw a 1% year-over-year decline, coming in at $407 million of gross billings.
“We are entering the fourth quarter with great momentum, and are off to a good start towards a strong holiday season,” Kreiz said.
Expanding Partnerships
Kreiz said Mattel has also been working to expand its partnerships with other brands a part of the company’s growth strategy, including a renewal of the decade-long partnership with WWE, which includes one of the longest-running continuous action figure assortments and several collaborations with other brands such as Ghostbusters and Masters of the Universe.
Mattel also secured global licensing rights for toys related to the forthcoming Disney movie “Lightyear,” set to be released in June. The collection is expected to include action figures, vehicles, games, preschool items, and playsets, among other merchandise. This agreement is separate from Mattel’s existing license for toys related to the “Toy Story” franchise.
Executives declined to provide guidance on sales expectations of “Lightyear” merchandise, but Kreiz said he expects it to be “a meaningful addition to our portfolio.” The most recent “Toy Story” movie netted approximately $200 million of retail sales for Mattel.
Kreiz told analysts that the company currently has 13 live-action movie projects based on its intellectual property (IP) in development, as well as 30 new TV shows in production and 30 TV shows in development during the third quarter. Last week, Mattel also launched Barbie Radio, a digital radio station playing music from Barbie’s music catalog, in partnership with iHeartMedia and Warner Music Group.
“We continue to make progress on our mid- to long-term strategy to capture the full value of our IP,” Kreiz said.
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