The Mattel Inc (NASDAQ: MAT) stock price was down 1.27% a day after its second-quarter earnings results were released. The company recorded a 13% constant currency decline in net sales to $1,087 million. The company’s gross margins rose 0.70% to 45.1% from last year’s 44.9%.
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While the recent release of the Barbie movie by Warner Bros, which is based on Mattel’s iconic Barbie doll, triggered a massive 33% surge in Mattel’s share price over the past month, the release of the movie had minimal impact on the company’s finances during Q2. Still, it will impact the company in the second half of 2023.
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The Barbie movie had a record-breaking opening weekend, grossing $356.3 million in theatre tickets globally. The movie is expected to be one of the year's top-grossing films, but its impact on Mattel’s revenues will be felt from Q3 onwards and into the holiday shopping period.
Mattel’s recorded an operating income of $63 million, representing a $62 million decline from last year, with its adjusted operating income coming in at $75 million, marking a decline of $47 million.
Like many other toy retailers, the company struggled with high inventory levels from the pandemic when parents stocked up on toys to get through the lockdowns. However, the company now expects the period of unwinding the inventory to be almost over.
Ynon Kreiz, Mattel’s Chairman and CEO, said: “Mattel’s second quarter financial results were in-line with our expectations. We significantly increased free cash flow and continued to gain market share. Importantly, this moment will be remembered as a key milestone in our company’s history with the release of the Barbie movie, our first ever major theatrical film.”
Anthony DiSilvestro, Mattel’s CFO, added: “While comparisons improved from the first quarter, our second quarter financial results were negatively impacted as retailers continued to manage inventory levels and by some overall industry softness. At this point, we believe the retail inventory correction is mostly behind us, and we look forward to meeting consumer demand for our product as we enter the second half of the year and the all-important holiday season.
*This is not investment advice.
Mattel stock price.
The Mattel stock price was trading down 1.27% at $21.05, from Wednesday’s closing price of $21.32.
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