Mattel FY 2020 Results Beat Expectations & Show Strength Of Core Brands
Mattel just released their full year 2020 results which show that Mattel beat analysts’ expectations and had a great year in terms of a modest sales increase, a massive leap in profitability and a number of positive trends in terms of other key metrics.
The two biggest growth areas for the business in 2020 (according to Mattel’s presentation to the stock market) were Dolls (up 13%) and Vehicles (up 12%). Obviously these two categories contain 2 out of 3 of Mattel’s power brands: Barbie and Hot Wheels (the 3rd being Fisher Price). Arguably Mattel benefitted in 2020 from the lack of cinematic movie releases due to the pandemic and resultant lockdowns. Typically a slow movie year leads to increased sales on well known and trusted brands.
But beyond this boost, it looks like Mattel is heading in a good direction, even if 2021 and certainly 2022 will offer more competition in terms of content driven licensed toys from competitors. CEO Ynon Kreiz has headed up Mattel for nearly 3 years now, and his background in the world of content production and distribution is starting to shine through with new content production growing – the results announcements included the following update on content: 11 feature films announced and 17 TV shows/specials in production.
While the toy market is full of challenges looking forward, Mattel seems to have turned the ship around and is heading in a good direction. Most notably, the resurgence of Barbie is a major achievement for Mattel’s teams. Over the last 6 or 7 years, the brand has successfully repositioned for a new generation and new social accountability which has been a major challenge for many businesses. When Mattel lost the Disney Princess license to Hasbro, it was seen as a major blow as a chunk of sales in the region of $500m disappeared out of the door to a major rival. The outcome though appears to be a greater focus on flagship brand Barbie, so with royalty rates for licensed toys at (arguably) an all-time high, it looks Mattel have swapped less profitable revenue for higher margin, increased brand equity and better long-term prospects for Barbie.
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