‘Barbie’ boosts Mattel’s third-quarter results, but shares fall in after-hours trading

Mattel beat Wall Street expectations for revenue and adjusted earnings per share in the third quarter, thanks in large part to its successful release Barbie in July.

Revenues rose 9% to $1.9 billion in the period ended September 30 compared to the same quarter last year. Earnings excluding non-cash charges were $1.08 per share, compared with 82 cents a year earlier. Including the non-cash charge of 59 cents for the creation of a valuation allowance on foreign deferred tax assets, earnings per share were 41 cents.

Analysts had expected earnings of 86 cents per share and revenue of $1.83 billion.

Despite the double setback, Mattel shares fell 7% in after-hours trading after ending the regular trading day a fraction to $20.11. While the stock price rallied more than 15% in the late summer and fell as Barbie invaded pop culture, the stock has fallen recently and remained more or less flat for the year.

A blow to the stock was a 13 percent drop in billings in the American Girl division as some toy industry analysts speculated whether a rebrand was in order.

Mattel raised its full-year profit forecast. Chief Financial Officer Anthony DiSilvestro said the move was due to “our performance this year and our expectations for a strong holiday season.”

Barbie marked Mattel’s first serious attempt at film or series adaptation of its properties after decades of focusing primarily on the traditional business of making and marketing toys. The Warner Bros. release was the biggest in the studio’s more than century-long history, grossing more than $1.4 billion worldwide. It has been playing in theaters for weeks and will appear in many lucrative additional and streaming windows in the coming months.

In the official results publication, CEO Ynon Kreiz was full of praise Barbie as a “milestone” and increase in quarterly results, with an increase in sales of dolls, dream houses and other items, accompanied by a decrease in box office receipts. The film helped boost the company’s gross margins, which rose to 51% from 48.2% in the year-ago quarter. Mattel said the gains were “primarily due to a favorable mix, primarily benefits related to the Barbie movie” and other factors.