By Tonya Garcia, MarketWatch
Mattel Inc. sees opportunity in soft, stuffed “plush” toys, a $2.4 billion category that’s currently occupied by the blockbuster Baby Yoda doll, which was the largest pre-sell in the company’s history.
Mattel /zigman2/quotes/209819189/composite MAT -2.59% hosted an analyst meeting over the weekend at the 2020 Toy Fair in New York City in which Chief Operating Officer Richard Dickson said the company is now looking for opportunities in its own intellectual property to grow this “whitespace” category.
Previously, the company relied on licensed opportunities.
“[W]e see new potential with both our own IP and partner IP and a new capability to help grow our entertainment partnerships,” Dickson said during the event, according to a FactSet transcript.
“There is no greater proof than the phenomenon called The Child from Disney’s /zigman2/quotes/203410047/composite DIS +0.47% The Mandalorian also known as Baby Yoda. We created this hit plush in just three weeks. And the results have been epic.”
Dickson said additional Star Wars plush toys are on the way, along with Minions from the “Despicable Me” franchise.
Overall, the dolls category was up 7% in 2019, with Barbie growing 9%, reaching a six-year sales high, the company said.
“Last year, more than half of all Barbie dolls sold represented diversity, both growth the size of Barbie collections and bringing new consumers to the brand,” Dickson said.
Among the early successes for Barbie in 2020 are Barbie Color Reveal, a doll that reveals its skin tone and other features with water, and Breathe With Me Barbie, a wellness doll created in partnership with the meditation app Headspace.
“Perhaps the key takeaway from Mattel’s Toy Fair meeting was the company’s more upbeat tone against an overall cautionary consumer landscape,” wrote UBS analysts.
Earlier this month, Mattel reported fourth-quarter net income of $200,000, or flat earnings per share, down from $9.6 million, or 3 cents per share, in the prior year. Adjusted EPS of 11 cents blew past the penny-per-share FactSet consensus. Sales fell 3% year-over-year to $1.47 billion from $1.52 billion and were below the $1.50 billion FactSet guidance.
UBS rates Mattel stock neutral with a $13 price target.
Mattel stock is down 15% for the past year.