Mattel’s profits slide 46% in quarter
By Staff -- Playthings, 2/2/2009 7:39:00 AM
EL SEGUNDO, Calif.—Mattel today said its net income for 2008’s fourth quarter and full-year fell sharply, hampered by sales losses for three of its four major brand segments.
The world’s largest toymaker reported net income of $176.4 million, or $0.49 per share, for the fourth quarter of 2008, a 46 percent drop from the corresponding quarter of 2007. For the year, net income was $379.6 million, or $1.05 per share, down 36 percent from 2007.
For the quarter, net sales fell 11 percent from the corresponding period of 2007 to $1.94 billion, well short of Wall Street analysts' predictions of revenue in the $2.2 billion range. The results included an unfavorable impact from changes in currency exchange rates of 5 percentage points. On a regional basis, fourth quarter gross sales were down 6 percent in the U.S. and down 20 percent in international markets, which included a negative impact from changes in currency exchange rates of 11 percentage points. Operating income for the quarter dropped 36 percent to $232.4 million.
For the year, net sales were off 1 percent to $5.92 billion and included no impact from changes in currency exchange rates. On a regional basis, full-year gross sales were down 2 percent in the U.S. and slipped 1 percent in international markets, where results were helped by changes in currency exchange rates by 1 percentage point. Operating income for the year was $541.8 million, down 26 percent compared to 2007.
"Our business wasn't immune from the deteriorating economic environment of 2008," said Robert A. Eckert, Mattel’s chairman and CEO. “In response, our focus for 2009 is on cost and spending reductions, and maintaining a strong balance sheet.”
At the toymaker’s largest business unit, Mattel Girls & Boys Brands, fourth quarter worldwide gross sales were down 17 percent versus a year ago to $1.12 billion. The unit’s worldwide gross sales for its Barbie brand were down 21 percent and worldwide gross sales for Other Girls Brands were down 8 percent. Worldwide gross sales for its Wheels category, which includes the Hot Wheels, Matchbox and Tyco R/C brands, were down 19 percent. Worldwide gross sales for its Entertainment business, which includes Radica and Games and Puzzles, were off 7 percent for the quarter.
For the year, worldwide gross sales for the Mattel Girls & Boys Brands unit were $3.64 billion, or down 2 percent. Worldwide gross sales for the Barbie brand were down 9 percent. Worldwide gross sales for Other Girls Brands were up 11 percent for the year. Worldwide gross sales for the Wheels category were up 4 percent. Worldwide gross sales for the Entertainment business, including Radica® and Games and Puzzles, were down 4 percent.
Fourth quarter worldwide gross sales for the Fisher-Price Brands business unit, which includes the Fisher-Price, Little People and Power Wheels brands, were $754.2 million, down 10 percent. For the year, worldwide gross sales for the Fisher-Price Brands business unit were $2.36 billion, down 3 percent.
Fourth quarter gross sales for the American Girl Brands business unit, which offers American Girl branded products on a direct to consumer basis, rose 5 percent to a record $254 million. For the year, gross sales for the American Girl Brands business unit rose 7 percent to $463.1 million. Eckert called the American Girl unit's results "a testament to prudent retail expansion and terrific marketing, such as last summer's Kit Kittredge theatrical release."
