April 29 (Reuters) - Mattel raised its annual profit forecast and beat analysts' estimates for quarterly sales on Wednesday, benefiting from resilient demand for toys and growth in its entertainment business.
As traditional toy sales come under pressure, the company has been investing in its IP-led strategy, banking on films like "Masters of the Universe" and "Matchbox" and an expanding slate of licensing and digital partnerships to power demand.
The Barbie maker also acquired the remaining 50% of
a joint venture with China's NetEase as part of the plan.
"We continued to make progress on our strategy to grow our IP-driven play and family entertainment business and are seeing top-line acceleration in the second quarter to date," CEO Ynon Kreiz said in a statement.
The Hot Wheels owner has also teased a new lineup of "KPop Demon Hunters" dolls to be released later this year after it failed to cash in on the success of the runaway Netflix hit over the holiday shopping season.
Mattel's first-quarter net sales of $862.2 million beat analysts' estimates of $804.7 million, according to data compiled by LSEG.
For the full year, the company expects adjusted profit per share to be between $1.27 and $1.39, compared to its previous guidance of $1.18 to $1.30.
Mattel, which maintained its annual sales target, said the forecast includes potential impacts of the conflict in the Middle East.
The company, however, said it did not include benefits from any potential U.S. import tariff refunds in its forecast.
"We did start the process and are actively working through the system," Kreiz told Reuters about the refunds, noting that "the timing and the ultimate outcome are still not clear."
Adjusted gross margin fell to 45.1% from 49.6%, with the company citing tariff costs as well as a stronger dollar.
The company logged an adjusted loss per share of 20 cents, compared with analysts' estimates of 21 cents.
Rival Hasbro last week announced preliminary quarterly sales that exceeded analysts' expectations.
(Reporting by Koyena Das in Bengaluru; Editing by Sriraj Kalluvila)
