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'Barbie' movie hype sends Mattel stock surging

Surprisingly one of the hottest stocks in the past month isn't leading AI play Nvidia, profit beast Apple, or even Threads-dropping Meta.

Nope. It's Mattel stock (MAT), as the 78-year-old toymaker appears to have struck cultural relevance gold with its upcoming "Barbie" movie.

Shares of Mattel are up 15% over the past month, outperforming the stock price of Mr. Potato Head-selling Hasbro, which has a 7% gain. And since you are wondering, shares of Nvidia are up 9% in the last month, Meta stock has notched a 12% increase, and Apple stock has trucked along with a 4% improvement.

Mattel's "Barbie" is a live-action PG-13 flick headlined by Margot Robbie as Barbie and Ryan Gosling as Ken. It was directed by Greta Gerwig and reportedly had a budget of up to $100 million to make.

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The movie is slated to hit theaters on July 21, and Robbie, Gosling, and the rest of the star-studded cast are currently out doing red carpet events to build anticipation.

"Barbie is a cultural conversation at this point," Mattel COO Richard Dickson told Yahoo Finance Live (video above). Dickson is credited with reinventing Barbie and making the brand more in line with cultural trends in his work at Mattel over the last five years.

Mattel is betting that the cultural conversation around Barbie materializes in strong profit figures, created in a few different ways.

LOS ANGELES, CALIFORNIA - JULY 09: Margot Robbie, Ryan Gosling attend the World Premiere of
Margot Robbie and Ryan Gosling attend the World Premiere of "Barbie" on July 09, 2023, in Los Angeles, California. (Photo by Frazer Harrison/FilmMagic,) (Frazer Harrison via Getty Images)

First is through the licensing of the Barbie name to merchandise that has sprouted up everywhere ahead of the movie's release. Mattel, for instance, inked a Barbie apparel deal with specialty retailer Gap (GPS) that hit stores on May 23.

The product line ranges from pink Barbie hoodies to pink pet clothing.

Fast fashion house Forever 21 has also released a Barbie-inspired clothing line.

"I think what really becomes more interesting as you see the Barbie brand evolve is from a character into a platform and ultimately a franchise," Dickson said. "And so from toys to lifestyle products to live experiences, digital gaming, now film, you really start to see the manifestation and the monetization of the power of this incredible franchise."

Dancer Kim Manning performs a routine to promote the film
Dancer Kim Manning performs a routine to promote the film "Barbie" at the WeHo Pride Parade in West Hollywood, Calif., on Sunday, June 4, 2023. AP Photo/Damian Dovarganes) (ASSOCIATED PRESS)

The other profit driver is likely to come from the movie itself, which was produced by Mattel Films and is being distributed by Warner Bros.

Stifel analyst Drew Crum recently estimated the "Barbie" movie could haul in $400 million at the box office. Crum's previous sales estimate stood at $325 million.

"Barbie is the first of several movie releases from Mattel Films, with a stated mission to be an IP-driven toy business, and thus we see a successful launch as driving greater confidence around this part of the company's strategy," Crum said. "And a higher box office = higher profits for Mattel ~ since the company did not fund production our estimates (including adj. EPS = $0.08) are admittedly modest, but a stronger showing in theaters certainly can't hurt numbers."

And lastly, a successful Barbie debut could validate the 14 other content projects in development for Mattel, including a Warner Bros. movie based on the toy car brand Matchbox.

CEO of Mattel, Ynon Kreiz, arrives at the premiere of
CEO of Mattel, Ynon Kreiz, arrives at the premiere of "Barbie" on Sunday, July 9, 2023, at The Shrine Auditorium in Los Angeles. (AP Photo/Chris Pizzello) (Chris Pizzello/Invision/AP)

Investors appear to be betting in advance that some of those projects pay off financially for Mattel, based solely on early reads for Barbie.

"Barbie is clearly an important brand. It's one of our three power brands, and it will be in many ways a showcase for the quality of the movies that we're looking to make, the type of partnerships we're formulating with lead talent in Hollywood, working with major studios," Mattel CEO Ynon Kreiz told Yahoo Finance Live.

Brian Sozzi is Yahoo Finance's Executive Editor. Follow Sozzi on Twitter @BrianSozzi and on LinkedIn. Tips on deals, mergers, activist situations or anything else? Email brian.sozzi@yahoofinance.com

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