The El Segundo, California-based company is bouncing back from disastrous results a year ago, when the pandemic wiped out stores and led to factory closings and production delays. Barbie and American Girl doll sales led the rebound, particularly in North America, with worldwide billings soaring 69%.
Mattel now expects sales to rise 6% to 8% in 2021, an increase from its previous projection of a mid-single-digit gain in revenue. Earnings before interest, taxes, depreciation and amortization will be $800 million to $825 million, about $25 million more than estimated in February.
“Following the third consecutive quarter of growing market share, we are strengthening our position as a consistent leader in the toy industry,” Chief Executive Officer Ynon Kreiz said in a statement. “We believe we are very well-positioned to improve profitability and accelerate top-line growth in 2021 and beyond.”
Mattel rose as much as 9.4% to $22.85 in extended trading in New York after the results were announced. If that holds in Friday trading, it will the highest for the shares since June 2017. The stock has advanced 20% this year, mostly as Barbie sales continue to outperform.
The company has worked to improve profitability through cost cuts and other measures, and its adjusted gross margin increased to 47% from 43.5% a year earlier. Further, its credit rating has improved after the company was downgraded to junk in 2017, when sales and margins were tumbling. It completed a $1.2 billion refinancing over the quarter, reducing annual interest expense by $40 million.