How the Barbie Movie Boosted Mattel’s Financial Performance

Barbie, the iconic doll that has been a part of children’s lives for over six decades, has made a stunning debut on the big screen. The live-action movie, directed by Greta Gerwig and starring Margot Robbie as Barbie, has been a massive hit with critics and audiences alike, earning rave reviews and breaking box-office records.

The movie, which follows Barbie’s journey of self-discovery and empowerment in the human world, has been praised for its humor, heart, and message of inclusivity and diversity.

The Movie’s Impact on Mattel’s Revenue and Profit

The Barbie movie’s success has boosted Mattel (MAT). Mattel is the toy company that owns the Barbie brand and co-produced the film. The movie has generated substantial revenue and profit for Mattel. It has also revitalized the sales of Barbie dolls and related products. These products had been declining in recent years.

Mattel’s second-quarter earnings report showed the positive results. The company’s net income was $27 million. It beat Wall Street expectations. It was almost 60% higher than the same period last year. The company attributed the positive results to the Barbie segment. The Barbie segment had a strong performance. It saw a 12% increase in sales globally. Mattel CEO Ynon Kreiz praised the movie. He said that it was a “game-changer” for the company. He also said that it would have a lasting promotional impact on the brand.

The Movie’s Impact on Mattel’s Brand Awareness and Recognition

The movie has increased Mattel’s brand awareness and recognition. In addition, it has boosted its other properties, such as Hot Wheels, Polly Pocket, and American Girl. As a result, Mattel plans to make more movies based on its intellectual property. For instance, some examples are Barney, Thomas the Tank Engine, and Uno. Furthermore, Mattel’s goal is to create a “Mattel universe”. To achieve this, it wants to emulate Marvel’s success. After all, Marvel has produced dozens of blockbuster movies featuring its characters. According to Kreiz, Mattel had a “treasure trove” of intellectual property. He also said that it could be leveraged across multiple platforms and media.

The Movie’s Impact on Other Companies Associated with It

The movie has benefited other companies that are associated with it. For instance, one of them is AMC Entertainment Holdings (AMC). It operates AMC theaters that aired the film nationwide. Similarly, another one is Birkenstock. It is the footwear maker whose sandals were featured in the film. In addition, there are also paint companies like Rosco and Sherwin-Williams (SHW). They supplied the vast quantities of pink paint used for the movie’s set. These companies have seen an increase in their sales and stock prices. This is because of their exposure to the movie’s audience.

The Movie’s Impact on Mattel’s Future Growth Potential

By demonstrating that Mattel can successfully transform its toy brands into media franchises that appeal to a wide range of consumers, the movie has created new opportunities for Mattel to expand its business and reach new markets and audiences.

In addition, the movie has opened up new avenues for licensing, merchandising, and cross-promotion with other partners. Furthermore, the movie has established a loyal fan base that will likely support future sequels or spin-offs featuring Barbie or other Mattel characters.

Conclusion

Based on these factors, we can conclude that the Barbie movie has had a positive and significant impact on the financial performance and outlook of Mattel. As a result, the movie has generated substantial revenue and profit for Mattel, as well as enhanced its brand value and reputation. Moreover, the movie has created new opportunities for Mattel to expand its business and reach new markets and audiences.

Financial Ratios to Support the Conclusion

To support the conclusion, we can use some financial ratios that measure Mattel’s performance and value. For example:

Earnings per share (EPS)

This is the amount of net income that Mattel earns for each share of its common stock. It indicates how profitable Mattel is and how much it can pay to its shareholders.

According to Mattel’s second-quarter earnings report¹, its EPS was $0.08, which was higher than the analysts’ estimate of $0.01. Price-to-earnings ratio (P/E): This is the ratio of Mattel’s current share price to its EPS. It indicates how much investors are willing to pay for each dollar of Mattel’s earnings. It reflects the market’s expectations and confidence in Mattel’s future growth and profitability.

According to Yahoo Finance, Mattel’s P/E ratio as of August 7, 2023 was 29.88, which was lower than the industry average of 36.69.

Return on equity (ROE)

This is the ratio of Mattel’s net income to its shareholders’ equity. It indicates how efficiently Mattel uses its equity to generate profits. It measures Mattel’s financial performance and value creation for its shareholders. According to Yahoo Finance, Mattel’s ROE as of June 30, 2023 was 5.79%, which was higher than the industry average of 4.86%.

Therefore, we expect that Mattel’s forecasted share value may increase soon, reflecting its strong growth potential and competitive advantage. According to the web search results, the average 12-month stock price forecast for Mattel stock is $25.25, which predicts an increase of 17.83% from the current price of $21.43 . The lowest target is $23 and the highest is $28. On average, analysts rate Mattel stock as a strong buy.

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