By Uday Sampath Kumar
(Reuters) -Mattel Inc raised its full-year sales forecast on Tuesday, expecting sustained robust demand for its Barbie and Hot Wheels brands into the holiday season despite upcoming price hikes.
The California-based company's shares rose 5% in extended trading after Mattel (NASDAQ:MAT) also reported a 40% jump in quarterly sales and a surprise profit.
Barbie sales have surged in the last year as people turned to the iconic dolls to keep their children entertained during pandemic-led lockdowns, while Mattel's push to make them more diverse with different skin tones and role models also struck a chord with customers.
Earlier this month, the company unveiled a doll based on Japan's four-time Grand Slam singles champion Naomi Osaka.
"It's more than a doll. It's a cultural icon and we continue to stay culturally relevant," Chief Executive Officer Ynon Kreiz told Reuters.
Kreiz said Barbie content on Netflix (NASDAQ:NFLX) and an upcoming movie starring Margot Robbie would help maintain the brand's popularity, while a new Hot Wheels video game would do the same for the toy car brand.
Overall gross billings for Barbie, Mattel's biggest brand, jumped 46% in the second quarter, while Hot Wheels' billings surged 67%.
"We do feel very good about the upcoming holiday season," Mattel's Kreiz said, despite the company raising prices in the second half of the year to cover higher commodity and transportation costs.
The company said it expects full-year constant currency net sales to increase by 12% to 14%, compared with prior forecast of a 6% to 8% rise, driven by demand for dolls, cars and action figures.
Mattel reported second-quarter total net sales of $1.03 billion, beating analysts' average estimate of $878.8 million, according to IBES data from Refinitiv.
Excluding items, Mattel reported a profit of 3 cents per share, compared with estimates of a loss of 5 cents per share.