Oct 22 (Reuters) - Mattel Inc reported a surprise rise in quarterly sales on Thursday and forecast more growth in the holiday season, as retailers rushed to restock their shelves of Barbie dolls and other toys in high demand from stuck-at-home kids.
With the COVID-19 pandemic forcing schools in many parts of the United States to hold classes online and limiting social entertainment options, parents have turned to playsets and games to keep children’s boredom at bay, boosting toy sales at retailers such as Walmart Inc and Target Corp.
As pre-pandemic inventories run low, Mattel has had to boost shipments, leading to a 10% jump in its net sales in the third quarter - the biggest increase in a decade and the first rise since the start of the health crisis.
According to research firm NPD, demand is expected to increase as wealthy families, which have an excess of money to spend with expensive vacations being canceled, splurge on toys during the holiday season.
“Based on ... the low retail inventories and the early start of the holiday shopping season, we expect net sales to grow in the fourth quarter,” Mattel Chief Executive Officer Ynon Kreiz said in a statement.
Barbie gross sales rose 29% to $532.2 million, the brand’s biggest quarterly sales since 2003, as Mattel’s efforts to make the traditionally white, blonde doll more inclusive with different skin tones and body types struck a chord with an increasingly diverse customer base.
Mattel posted net sales of $1.63 billion in the quarter ended Sept. 30, beating analysts’ estimates of $1.46 billion, according to IBES data from Refinitiv.
Net income rose more than four-fold to $316 million, as cost cuts beefed up profit margins. The company reported adjusted earnings of 95 cents per share. (Reporting by Uday Sampath in Bengaluru; Editing by Maju Samuel)
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