Mattel is working to catch up to an unexpected surge in consumer demand for toys as the holiday shopping season rolls near, CEO Ynon Kreiz told CNBC Friday.
“We are seeing tremendous demand for our products, more than we expected,” he said in an interview with Jim Cramer on “Mad Money.” “With such surge in demand, we are now working hard to be able to fulfill it.”
Mattel, the manufacturer of iconic toy and game brands like Barbie and Uno, surprised Wall Street when it posted a third-quarter profit that more than doubled analyst projections. The company recorded net profit of $316 million, which was four times better than pre-pandemic profit, on $1.6 billion in sales.
Mattel suffered losses in the hundreds of millions of dollars in the previous two quarters when business was upended by the coronavirus lockdown.
“Just extraordinary growth in demand, coming from a decline in the first half into such growth in the third quarter heading into the holiday season,” Kreiz said. “We’re working very hard to be able to try and fulfill it.”
With children across the country learning from home and spending more time inside during the pandemic, toys began to fly off the shelves as parents sought ways to keep children occupied outside of laptops, cellphones and other technologies. Retailers were pushed to refill their toy and board game inventories, which helped Mattel grow sales last quarter by 10%.
Barbie is one toy brand that flew off the shelves. Mattel, which manufacturers the iconic line of dolls, said it was up almost 30% in each segment. Producing $532.2 million in gross sales, it was the brand’s best showing since 2003 as the company sees positive reception for a more inclusive range of dolls.
“Demand for barbie grew by 50%,” Kreiz said. “It really speaks to the strength and ongoing momentum of the brand.”
The company now has its sights set on the fourth-quarter holiday shopping season and estimates that year-over-year sales will continue to grow.
Despite the millions of Americans who remain out of work due to the effects of widespread lockdowns earlier this year, the research firm NPD projects that families, especially wealthier ones, will have even more to spend on toys from money leftover by reduced vacation and travel spending this year.