MAT - Bloomingdales to Balmain bank on Barbie to bolster sales

2023-07-18 15:49:35 ET

It’s becoming increasingly difficult to find a brand NOT associated with Barbie and all things pink accompanying the imminent release of Warner Bros. Discovery’s ( WBD ) movie this weekend.

From popcorn to hairbrushes, from Bloomingdale’s, owned by Macy’s ( M ), to The Gap Stores ( GPS ) and Balmain, if you want in on the Barbie craze, you’ve got no shortage of options.

That’s good news as companies have said sales are slowing while inflation persists — if at a slower pace than before.

There’s also the Hollywood strike that could make this weekend’s openings (including Oppenheimer ( CMCA )) that much more important for the industry, particularly as recent high-profile movies have failed to inspire with Indiana Jones and the Dial of Destiny ( DIS ) opening at $60.4M; Elemental ( DIS ) at $29.6M; and The Flash ( WBD ) at $55M. That compares to Spider-Man: Across the Spider-Verse ( SONY ), which opened to $120.7M.

On the other hand, as Emmy-award winning Succession actress J. Smith-Cameron tweeted earlier this month: “Is anyone else feeling bullied into being excited about the Barbie movie?”

Puzzles, sunglasses, popcorn, detanglers

Among the many, many products available and decked in Barbiecore are notebooks, pendants and popcorn.

Take Five Below ( FIVE ).

“Barbie could generate enough buzz via social media and other avenues to drive incremental traffic to FIVE and incremental spend in the process,” Roth MKM analyst David Bellinger wrote in a July 12 note.

The firm found more than 30 licensed Barbie items on the FIVE website including puzzles and notebooks and while it might not be enough to solely drive top-line improvement, Roth MKM views any incremental traffic and attached spend across the store as a modest positive.

FIVE could use the good news: It has seen EPS estimates revised lower 18 times in the past 90 days, and not once were they revised higher.

At last check, Barbie is tracking for a $93M opening weekend compared to an initial $50M to $60M projection, Roth MKM wrote.

Gap ( GPS ) is hoping its Barbie push will help refuel interest. It's offering matching pink hoodies for dolls and young girls as part of its sales strategy. NB: Shares are down 18% year-to-date.

High-fashion label Balmain is also offering a limited-edition collection for those who prefer a more refined and avant-garde take on Barbie.

And then there’s Bloomingdale’s online and in-store Barbie-Aqua clothing collaboration pop-up shop at its 59th Street store in New York. Macy’s ( M ), like FIVE, is also not in a great place with shares down 21% year-to-date and 13 EPS estimate revisions lower over the past three months and not one higher.

Empowerment in hair

Barbie being a movie and all, there must be popcorn. Regal Cinema of Cineworld (OTCPK:CNNWQ) partnered with Pops Corn to offer audience members caramel popcorn in her signature color.

"Barbara Millicent Roberts established herself as a fashion and culture influencer the moment she debuted in New York on March 9, 1959," said John Curry, senior vice president food service for Regal. "Barbie on the big screen is a dream come true, and we are excited to offer popcorn that complements her iconic style."

Meanwhile, Tangle Teezer announced a new limited edition of its detangler in signature Barbie pink using TikTok influencers to pitch it to consumers. Marketing house MG Empower said it created videos and still assets for influence marketing that embodies what Barbie is known for: empowerment, playfulness and inclusivity.

"Our cast of influencers will take us on a journey: As they brush their hair in the regular world, they unlock a pink, ethereal Barbie world where their imagination comes to life," said Maira Genovese, founder and president of MG Empower. "The brush is a must-have tool for people who believe great hair starts with imagination. With the simple stroke of a brush, you can become whoever you want to be."

Because nothing says empowerment like detangling one’s hair.

Good reviews

Box office forecasts continue to move higher as reviews have been “generally positive,” Stifel wrote. That should be good for Mattel ( NASDAQ: MAT ).

“While favorable reviews don't always translate to a higher box office, positive word-of-mouth certainly doesn't hurt,” Stifel wrote in a July 17 note. “Our Barbie movie estimates suggest modest contributions to Mattel’s ( MAT ) results.”

Those include about $100M of revenue comprised of: $75M in toy sales; $12.5M from consumer product licensing like clothing, perfume and toothpaste; and $11M in film revenue based on a global box office of $450 million.

MAT has already rallied over the past six weeks amid the Barbiecore marketing rush, with shares returning more than 20% in that time, Stifel wrote.

“Anticipation ahead of the theatrical release has been a key driver behind this move, and thus profit-taking could ensue near the launch,” Stifel said. Though if MAT can pull this off, it could help with confidence around the company’s strategy.

“Barbie's performance has implications for the stock beyond just the next few days or weeks,” Stifel said. Hopefully not including a boatload of unsold Barbie pink goodies.

MAT reports earnings next week.

More on Barbie-related madness:

• Mattel stock gets dolled up on Barbie movie hype
• Mattel defends Barbie trademark in legal battle with Burberry
• Is saving the 2023 summer box office an impossible mission?
• Mattel: Struggling Financials But Some Scope For Optimism

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