Barbie Movie Release May Boost Mattel’s Sales, but Wall Street Remains Cautious

WHAT YOU SHOULD KNOW

The release of the live-action “Barbie” movie starring Margot Robbie and Ryan Gosling is anticipated to have a positive impact on Barbie sales in the short term, with the biggest benefit likely coming from toy sales after the marketing campaign surrounding the film.
While the movie’s release may create a halo effect on the Barbie franchise, some analysts are cautious about its long-term impact on Mattel’s revenues, especially as the film targets an older audience and is rated PG-13, not aligning with the young children who are the primary Barbie consumers.
Mattel’s second-quarter results are expected to show falling sales and a net loss due to higher costs, slowing consumer spending, and retailers cutting back on inventories. Despite the buzz around the movie, Wall Street is wary about the sustained growth potential of Barbie sales and remains cautious about Mattel’s stock performance.

The release of the “Barbie” movie starring Margot Robbie has generated excitement, and analysts believe it could give a temporary boost to Mattel’s iconic doll sales. However, Wall Street remains skeptical about sustained growth. The movie’s impact on Barbie sales is expected to be most significant in the quarter ending September 29, with the biggest benefit coming from increased toy sales during the marketing frenzy around the movie’s release. Retailers worldwide have also joined in, offering themed merchandise like Barbie hoodies, perfumes, and toothbrushes.

While the movie’s release may create an overall positive effect on the Barbie franchise, some analysts doubt its long-term impact on Mattel’s revenues. The film targets an older audience and is rated PG-13, which may not align with the primary Barbie consumers, young children. UBS’ Arpiné Kocharyan believes the movie’s release could impact Mattel’s earnings due to the higher margins on the royalty stream. However, not all analysts are convinced of a significant sales boost, citing the movie’s target audience and rating as potential limiting factors.

Despite the buzz around the “Barbie” movie, Mattel is expected to report falling sales and a net loss in the second quarter. The company continues to face challenges from higher costs, slowing consumer spending amid inflation, and retailers reducing inventories. In recent years, Barbie was Mattel’s top brand, but it slipped behind Hot Wheels in gross billings during the first quarter of 2023. Mattel’s shares have shown modest gains in 2023, and its forward price-to-earnings multiple is higher than its rival Hasbro’s, signaling higher valuation expectations for the company.

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