We’re Spending Our Stimulus Checks on Toys and Mattel Sales Are Soaring
The combination of COVID-19 lockdowns and government stimulus checks has proven to be a winning tonic for toymakers like Mattel, which reported a robust gain in quarterly sales during what is historically a weak period for the industry.
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Mattel logged first-quarter revenue of $874.2 million, up 47% from the previous year and well ahead of consensus analyst estimates of $684.2 million. As CNBC reported on Thursday, the maker of Barbie, Fisher-Price, Hot Wheels and other popular brands benefited from the extra disposable income parents got from government stimulus checks.
The first quarter is usually a slow period for toymakers because it follows the previous quarter’s holiday sales, meaning much of the money earmarked for toys and games has already been spent. But government stimulus checks — combined with parents needing to keep their kids busy while the COVID-19 pandemic kept them stuck at home — created the perfect storm for the industry.
Mattel still lost money during the first quarter, which is typical. However, its losses narrowed to 10 cents a share from 61 cents the previous year and also came in well ahead of Wall Street expectations.
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The toy industry has been on a pretty good run ever since the pandemic hit. A separate CNBC article in January noted that industrywide U.S. toy sales hit $25.1 billion in 2020, up 16% from the previous year. Toy sales had been flat through mid-March of 2020 but picked up when families went into in lockdown.
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