The new Masters of the Universe movie wasn’t the box office hit Mattel executives were hoping for, but it is proving to be a winner in the toy aisles, boosting sales of action figures and related items, the company reported in announcing its second-quarter results.

Gross billings for Masters of the Universe merchandise have more than tripled year-to-date, according to Mattel.

“This is driven by the movie halo and energy and excitement and drive that the movie brought to the brand," Mattel Chairman and CEO Ynon Kreiz said in a conference call with investors after the earnings release. "When we look at the success of the movie, box office is just one aspect," he said.

“We’ve always said that not every movie will be the next Barbie,” Kreiz said. “But we also said that you don’t need a movie to be that successful as Barbie to have real economic impact on the company, because we own the IP."

“All we need is to ignite and delight fans and then we capture value across multiple verticals. And this is exactly the flywheel and the brand-centric operating model that we’ve been implementing,” Kreiz told investors.

Toy Story 5 also helped drive sales, according to Mattel.

The Masters movie underperformed at the box office, but has succeeded in attracting viewers since being released on Amazon’s streaming service, becoming the most-watched film on Amazon Prime Video globally, as well as the No. 1 most watched movie across all streaming platforms in the U.S., the first week of its streaming release.

Orders for action figures, Hot Wheels vehicles, building sets and games helped grow Mattel’s topline during the second quarter, but the company struggled with its bottomline, and tariffs, inflation, and higher advertising costs squeezed margins and reduced operating income.

Mattel grew its second-quarter sales by 10%, beating expectations, but profits were below expectations, with a net loss of $18 million, compared to net income of $53 million in the prior year’s second quarter.

Gross billings for the category “action figures, building sets, games and other” were up 35%. The doll category was down 5%, primarily due to a decline in demand for the Barbie brand.

The toy maker released its second quarter earnings after the market closed Tuesday.

Mattel’s stock had closed down slightly Tuesday, before the earnings release. It was up 1.52% in pre-market trading this morning, but began dropping as soon as the market opened, and was down more than 2% minutes after the opening bell.

Mattel’s earnings release came two weeks after top competitor Hasbro reported its second quarter revenue was up 16% year-over-year, and its adjusted operating profit was up 14%. Hasbro’s stock soared more than 10% immediately after the earnings release, and has continued to climb. It is up more than 11 percent year to date.

Mattel is under pressure to show that its strategy of repositioning itself as a modern toy company, with an emphasis on entertainment, intellectual property, and digital gaming, is working.

In May, Southeastern Asset Management, an investment group, issued an open letter to Mattel urging the company to explore strategic alternatives, including a sale to private equity buyers, to another toy company, such as Hasbro, or to a media company. Mattel replied with a statement saying “it will continue to consider the views expressed in Southeastern’s letter.”

Heading into the holiday season, Mattel has a number of potential sales drivers, including its KPop Demon Hunters dolls and actin figures, and the Octobeer release of the straight-to-streaming Matchbox The Movie on Apple TV, James Zahn, Editor-In-Chief of The Toy Book, said.

“By skipping theaters, Matchbox The Movie puts an action-packed toy commercial in millions of homes in October. They have a tight but strong line inspired by the movie, ready to roll,” Zahn said.

Refreshed versions of the Barbie Dreamhouse the Hot Wheels Ultimate Garage have the potential to be higher-ticket, “Wow” gifts for “a ton of happy kids” during the holidays, Zahn said.

Mattel has had success in connecting with adult consumers and collectors and has shown it can take “big swings with really creative products across brands like Monster High and Little People,” Zahn said.

“There is an excitement and enthusiasm on the action and vehicles side of Mattel that doesn’t carry over to the other categories,” he said, noting that an overdue packaging refresh for Barbie that was mentioned on the earnings call is a good start.

“The challenge is really how to unleash all that creativity in El Segundo and truly do something fresh, exciting, and fun to return underperforming categories to growth. That means taking some risks and making swift changes,” he said.