Mattel posts a surprise profit as Barbie sales fall despite movie hype

abcnews.go.com:

The “Barbie” movie created magic at the box office, but the iconic doll’s parent Mattel is bracing for it to make a big difference in the toy aisles

NEW YORK — The “Barbie” blockbuster movie created magic at the box office, but the iconic doll's parent Mattel is bracing for it to make a big difference in the toy aisles.

Mattel Inc. on Wednesday turned in a surprise profit and better sales during the second quarter than analysts expected. But worldwide sales of Barbie to retailers excluding adjustments fell 6% in the quarter ended June 30 as promotions were shifted to align with last weekend's release of the iconic doll's first live action picture. Mattel executives told analysts during an earnings call following the release that sales have improved in July, and it expects the movie will have a halo effect on the brand for years to come.

The film — which set an opening weekend record last week for the year — splashed worldwide attention on the doll and boosted shares of the company in the past month. Ahead of the opening, Mattel created a product marketing blitz with more than 100 brands plastering pink everywhere. But it won't likely see the full benefits of the tie-ins for awhile — and consumers are still spending cautiously on toys.

“We significantly increased free cash flow and continued to gain market share," said Ynon Kreiz, chairman and CEO of Mattel in a statement. “Importantly, this moment will be remembered as a key milestone in our company’s history with the release of the Barbie movie.”

The movie release comes also at a time when Kreiz, who came to Mattel’s helm in 2018, is turning the toy company into an intellectual property house, with “Barbie” the first of 14 live action movies planned with major studios.