'Barbie' boom helps Mattel lift annual profit target after bumper sales

(Reuters) - Mattel smashed third-quarter results estimates on Wednesday and lifted its annual earnings forecast ahead of the key holiday season, as the toymaker benefited from the box-office success of the "Barbie" movie.

Margot Robbie-starrer "Barbie" in July set records as the biggest opening of the year and Mattel CEO Ynon Kreiz reiterated that the buzz around the movie was expected to contribute more than $125 million towards the Dolls segment's key gross billings measure in 2023.

The company now expects annual adjusted earnings per share between $1.15 and $1.25, compared with its previous forecast of $1.10 to $1.20.

Mattel also shrugged off concerns around inventory destocking from retailers as it heads into the crucial holiday period.

Kreiz told Reuters that Mattel had "greater retail support compared to the prior year, with more shelf space, more representation on major holiday catalogs and more advertising".

The company is banking on the hype around "Barbie" to help overcome what is expected to be a softer shopping season, as sticky inflation crimps household budgets.

Worldwide gross billings, or the amount invoiced to customers, for Mattel's Dolls segment rose 24% in constant currency for the quarter.

"We expect to see an accelerated growth rate in the fourth quarter with significant gross margin expansion," Kreiz added.

Mattel slightly raised its annual adjusted gross margin target to between 47% and 48%, after margins for the quarter ended Sept. 30 rose 270 basis points to 51%.

Net sales rose 7% in constant currency to $1.92 billion, handily beating Wall Street expectations.

Adjusted profit per share came in at $1.08, beating analysts' estimate of 86 cents, according to LSEG data.

(Reporting by Juveria Tabassum; Editing by Devika Syamnath)