Mattel (MAT -0.60%) made waves this summer with its release of the movie Barbie, which has grossed more than $1 billion in ticket sales worldwide and propelled the beloved brand back into the spotlight. This transformation has been in the works for a while, and the company is taking full advantage of the film's success.

Mattel has many new projects in the works to bring the toy company's iconic brands into a new age of media and content creation, and it looks like this model might have staying power to last beyond the halcyon days of summer fun. Let's see why investors should pay attention.

Not a movie but a phenomenon

Mattel management coined the term "moving out of the toy aisle" to describe how it sees its vision for the future. It has moved from being strictly a toy manufacturer to leveraging its intellectual property with media and content creation, and Barbie was its first major feature film shown in theaters.

There's no question that Barbie has become what CEO Ynon Kreiz has called a "cultural phenomenon." Mattel inked 165 collaborations for licensed products and released a movie music album with popular singers. It sold out of the Barbie-themed products, not to mention its own movie-linked line of dolls and related accessories.

It's now further expanding its Barbie-based partnerships in the second half of 2023, and the impact of the Barbie movie should be significant for the coming months, if not longer.

Although it's still in second place for highest-grossing movie this year, close behind The Super Mario Bros. Movie, Time magazine called Barbie the "biggest movie of the year." It's also Warner Bros.' highest-grossing film ever, beating out the top-grossing Harry Potter and the Deathly Hallows--Part 2.

But there's much more going on, and Barbie is a springboard to get customers hooked on Mattel's other content. The impact will eventually fade, but Mattel has other tricks up its sleeve to keep customers in and out of the toy aisle.

How Mattel is moving out of the toy aisle

Mattel has been releasing content based on its iconic brands -- including Barbie, Thomas & Friends, American Girl, and more -- for several years leading up to the Barbie movie. However, progress has accelerated with several recent initiatives.

Over the summer, it released Barbie's Dreamhouse Challenge on HGTV and the Hot Wheels Ultimate Challenge on Comcast's NBC. It's also creating a new Barbie animated series debuting on Netflix in September, following up on previous series and the Barbie live-action film, and it recently released an animated film based on the Polly Pocket brand.

At the same time, it announced that it's creating a publishing imprint and will partner with Simon & Schuster as a distribution partner.

A major announcement was the news that Mattel is opening its first theme park on a 9-acre property in Arizona at the VAI Resort in 2024. The park is being built as an indoor attraction, including two Hot Wheels-based roller coaster rides and a Barbie dream house.

Getting ready for growth

After demonstrating real progress from earlier stagnation prior to the pandemic, Mattel's sales have been suffering from people cutting back due to inflation. It felt the effects as retailers corrected their inventory positions, but management feels that these corrections are finished, and now, it has a chance to get back to growth.

The toy business is still its core segment, and it renewed its deal with Warner Bros. to make toys for franchises like Harry Potter and the DC Universe.

In the second quarter of 2023, sales fell 12% from last year. The report wasn't very exciting and was in line with current market conditions, but it also wasn't any worse than expected. Management is working through these short-term challenges and positioning itself to bounce back when the environment is more conducive to growth.

The turnaround isn't over yet

Mattel is on pace to rebound and has a strong long-term opportunity as the toy industry overall recovers, and it captures market share even now. However, none of this is guaranteed.

So far, Mattel stock has hung on to its gains from the Barbie movie, and it's up 22% this year. It's likely to move sideways until there's some more positive momentum, either in the form of improved results or other major announcements. But I'm impressed with its trajectory, and it's worth watching to see whether it can sustain its progress.