Toy company Mattel (MAT 0.03%) has a portfolio full of top toy brands, including Hot Wheels, Thomas & Friends, Fisher-Price, and Barbie. Good brands give a company a moat, which billionaire investor Warren Buffett says is key to fending off competition.

This year, the strength of Mattel's brands has been on full display with the success of the Barbie movie, which has been generating impressive box office numbers thus far. Does the movie's success make Mattel stock a surefire winner and an investment that you should add to your portfolio today?

Barbie is on track to be the top-grossing movie this year

Mattel and Warner Bros. Discovery have struck gold with the Barbie movie. As of this writing, the movie's gross domestic ticket sales were over $594 million, and it has become the highest-grossing movie in North America this year.

It should soon become the top movie worldwide as well. At $1.34 billion in gross global sales, it's only slightly trailing The Super Mario Bros. Movie, which has amassed $1.36 billion. Those two films are the only ones to hit $1 billion at the box office so far this year.

The Barbie brand could use a boost

Barbie is one of the Mattel's top brands, contributing just under $1.5 billion in gross billings last year (this doesn't factor in sales discounts and adjustments). That represents one-quarter of the company's total gross billings of $6 billion.

But while it's significant, Barbie-related gross billings were down 11% in 2022. In the company's second-quarter earnings report, gross billings for Barbie totaled $282.7 million and declined at a more modest rate of 6% year over year.

Supply chain issues have hurt toy companies in recent years, and with inflation also weighing on consumers, macroeconomic conditions still aren't really improving. Having a key brand such as Barbie struggling to generate growth has only made it more difficult for Mattel to keep its sales from falling.

MAT Revenue (Quarterly YoY Growth) Chart

Data by YCharts. YoY = year over year.

Revitalizing the struggling brand should help inject some growth into Mattel's business, but investors will need to be patient.

Why Mattel's sales growth could improve in future quarters

Mattel hopes that it can benefit from the movie's success by expanding products and partnerships to help boost the brand overall. There are more than 165 consumer-product partnerships that are now tied to the Barbie movie.

The company also says that toys related to the movie have sold out in its major distribution channels, and more products will launch in the second half of the year.

Keep in mind that any significant boost from this excitement around the film won't appear in Mattel's results until the latter half of the year since Barbie debuted in theaters in July (part of the company's third quarter currently underway). The next earnings report will be the big test to see how much impact the movie may have on the brand and its growth prospects.

More movies are coming

Mattel CEO Ynon Kreiz says the Barbie movie was about showcasing the brand. And based on the box office numbers, the brand and intellectual property look strong.

What's encouraging is that Barbie isn't even Mattel's top-performing brand. That title belongs to Hot Wheels, which grew billings 10% year over year to $315.2 million in the second quarter.

There is a Hot Wheels movie in the works that could be out as early as 2025. Mattel is also working with companies on other potential projects that center around its other properties, including Barney, Polly Pocket, Rock 'Em Sock 'Em Robots, and others.

Putting its popular brands back in the public eye creates buzz and renews consumer interest, not to mention the opportunity to release new products related to the movies. These are good ways for Mattel to put a spotlight on its toys, which can hopefully give the business a much-needed boost.

Is Mattel's stock a buy?

Mattel stock currently trades at 18.5 times its forward earnings estimates. That is a premium to its rival Hasbro, which trades at a multiple of 17.6, and Mattel's own five-year average multiple of 15.9. With declining growth and a relatively high price tag, the consumer discretionary stock doesn't seem like a compelling buy at first glance.

But with some growth catalysts on the way that could generate new momentum for the company, Mattel could make for an interesting long-term bet. Management is looking to capitalize on its well-known intellectual property, and these moves should pay off in the long run. Look to the third-quarter report for early signs that management's strategy is working.