Mattel's global Q2 soars; U.S. drags
By Brent Felgner -- Playthings, 7/16/2007 8:42:00 AM
EL SEGUNDO, Calif.—Mattel’s gross margins rose five times more than expected and Barbie sales soared to their highest levels in nearly four years as the company reported its second quarter results this morning.
International sales drove the top line at Mattel, which reported a 7 percent total increase in second quarter revenues, to $1.02 billion. Gross sales decreased 3 percent in the U.S., while international sales soared 18 percent during the period.
Gross margins improved 260 basis points to 46.1 percent, compared to 43.5 percent during the same quarter a year ago.
Worldwide, sales for Barbie were up 6 percent, representing the best results the brand has seen since the third quarter of 2003, according to a note from Sean McGowan, research director at Wedbush Morgan. Barbie sales declined 5 percent in the U.S. but were offset by a 13 increase worldwide, he said.
McGowan also indicated that margins were originally expected to improve just 50 basis points.
The company reported net income of $43.1 million, 11 cents per share, compared to $37.4 million, 10 cents a share, during last year’s second quarter—a 15 percent increase.
“Overall, we had a good quarter, especially given the comparisons with strong sales from movie-related toys in last year’s second quarter,” said Robert Eckert, chairman and CEO. “While the first half is not particularly significant to the highly seasonal toy industry, our positive results continue to reflect the benefits of our diversified portfolio of global brands.”
Operating income for the quarter was $63.5 million, compared to last year’s $49.9 million. Last year’s Q2 sales were $957.7 million.
Worldwide, sales for Hot Wheels were up 20 percent and Fisher-Price 22 percent. Sales at American Girl dropped 10 percent.
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