Mattel experienced a short-lived surge in its stock price on Friday thanks to a blowout quarter fueled by continued demand for Barbie — who’s become unstoppable since the pandemic took hold.
The El Segundo, Calif.-based toymaker’s shares shot up as much as 12 percent after the opening bell to $23.31 — the stock’s highest price since April 2017 — before falling back down to under $21 a share, roughly where it had been trading previously.
The bump followed Mattel’s Thursday announcement that sales surged 47 percent in first quarter sales as parents continued to spend their disposable income, including their coronavirus stimulus checks, on toys.
Barbie, 62, led the boom with sales of the “it” girl doll jumping 87 percent over the previous first quarter. It’s just the latest boost for team Barbie, who’s weathered criticisms in recent years only to morph into one of the hottest toys of the pandemic.
“Barbie’s cultural relevance truly has never been stronger,” said Richard Dickson, Mattel’s president and chief operating officer, who noted that the toy brand has been “leaning into diversity, inclusivity and social impact.”
Mattel said first quarter sales rose to $874 million from $594 million a year ago, beating analysts’ expectations of $684.2 million. Mattel’s net loss also narrowed to $115.2 million, or 33 cents per share, compared to a loss of $210.7 million, or 61 cents per share, it reported this time last year.
But the stock surge didn’t last long as investors became fearful over whether Mattel will continue to outperform Wall Street’s expectations as vaccinations grow and people start venturing out again. Such concerns are compounded by the knowledge that Mattel is bumping up against the “slow” period for toy sales, BMO analyst Gerrick Johnson told The Post.
There are a lot of investors who are saying now “sell the COVID winners,” or “this is as good as it gets,” for Mattel, Johnson said. This is especially true for the toy industry, which tends to slow down in the spring and summer.
“Seasonally this is the time to sell,” toy stocks, Johnson said.
Despite these concerns, Mattel raised its guidance for the year. It now expects sales to rise six to eight percent in 2021, an increase from its previous projection of a mid-single-digit gain in revenue. And it expects earnings to be larger by $25 million more than it estimated in February to $825 million.
Mattel is “growth-company trading like a value stock,” wrote DA Davidson analyst, Linda Bolton Weiser in a note on Friday.