Barbie and Hot Wheels developer Mattel (MAT) delivered on its promises of having a strong holiday season after the toy giant’s Q4 earnings results showed a revenue beat at $1.79 billion.
“We were not just riding the wave of the industry,” Mattel CEO Ynon Kreiz said on Yahoo Finance Live (video above). “We outpaced the industry and continue to grow. And we say the headline is that our turnaround is now complete, and the company is in growth mode.”
While the pandemic has been an driving factor for the toy industry’s growth as parents spend more time at home with their kids, Kreiz said that the “strength and resilience” of the industry also plays a major role.
“It’s a strategic category for retailers,” Kreiz said. “It’s experiential. It drives foot traffic. The items are not expensive. And parents forever will spend money on children, especially when it comes to quality products and trusted brands. Play is here to stay. And we are leading the industry with momentum.”
‘This is the language we speak’
Several of Mattel’s landmark toy lines, which include American Girl dolls and Fisher-Price products, saw upward performances from Q4 2020 to Q4 2021.
And in January, Mattel regained licensing rights to Disney Princess and “Frozen” merchandise — which Kreiz described as “one of the crown jewels” of Disney — over competitor Hasbro (HAS).
“It’s important for Mattel for three reasons,” Kreiz said. “It scales our portfolio as the global leader in the dolls category. It adds another accretive growth driver, both for top line and profitability for us starting in ’23, and it’s also strengthened our position as a partner of choice for the major entertainment companies.”
As Kreiz forecasted in October 2021, Mattel was able to fight off supply chain disruptions and still have a successful holiday season.
“We see demand for our product at levels we have not seen in years,” he said. “And this is beyond COVID. We believe the industry will continue to grow, and within that environment, we will outpace the industry and grow even further.”
And even with the threat of inflation, Kreiz isn’t too concerned.
“Parents will continue to prioritize investing in children, especially a product that helps develop, inspire, and entertain,” Kreiz said. “This is the language we speak.”
Mattel isn’t the only toy company reveling in the success of the toy industry.
After Hasbro announced intentions to raise their prices to offset freight costs this week, the comapny’s Q4 earnings report blew past estimates by posting revenue numbers of $2.01 billion.
Meanwhile, Funko (FNKO), known for its Funko Pop Figures based on pop culture characters, has also seen some success in standing out among its competitors. The company acquired licensing rights to a deep well of movie and television franchises including Netflix (NFLX) series Stranger Things and Squid Game, and their latest steal, Nintendo’s Pokemon.
Analysts project Funko to report a net sales increase of $274.3 million, up 21.12% in 2021, whent he company reports earnings on March 10.
Luke is a producer for Yahoo Finance.
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