Mattel's income sinks
By Staff -- Playthings, 7/18/2008 7:26:00 AM
EL SEGUNDO, Calif.—Mattel’s profits in the second quarter of 2008 fell 48 percent from the corresponding period of 2007, as rising costs and falling Barbie sales offset gains in other key product lines both at home and abroad.
The toymaker’s 2008 Q2 net income was $11.8 million, or $0.03 per share, down from $22.8 million, or $0.06 per share, in the same period of 2007. Operating income for the quarter was $30.6 million, down $6.8 million from the same period of 2007.
Quarterly net sales rose 11 percent to $1.11 billion, a figure that includes favorable currency exchange rates worth 5 percentage points. On a regional basis, second quarter gross sales increased 3 percent in the U.S. and increased 15 percent in international markets, including favorable currency exchange rates of 10 percentage points.
For the second quarter, worldwide gross sales for the company’s largest business unit, Mattel Girls & Boys Brands, were $721.7 million, up 13 percent versus a year ago. On the girl side, the unit’s gains were driven by a 27 percent jump in worldwide gross sales for its non-Barbie “Other Girls Brands,” fueled primarily by the company’s High School Musical dolls. The Disney-licensed line offset a 6 percent decline in worldwide gross Barbie sales. Worldwide gross sales for the unit’s boy-friendly Wheels category, which includes the Hot Wheels, Matchbox and Tyco R/C brands, rose 32 percent, largely due to the addition of Speed Racer products. Worldwide gross sales for Mattel’s Entertainment business, which includes Radica and Games and Puzzles, grew 14 percent for the quarter, a gain mostly attribute to shipments of products tied to the movies Batman: The Dark Knight, Speed Racer and Kung Fu Panda.
Second quarter worldwide gross sales for Mattel’s Fisher-Price Brands business unit, which includes the Fisher-Price Core, Fisher-Price Friends and Power Wheels brands, were $428.0 million, up 4 percent versus the prior year, primarily due to growth in Fisher-Price Core and Power Wheels, and partially offset by declines in Fisher-Price Friends.
Second quarter gross sales for the toymaker’s direct-to-consumer American Girl Brands business unit were $61.1 million, up 10 percent versus last year, driven by strong sales of products tied to the Kit Kittredge movie, and from first time sales contributions from the brand’s Atlanta and Dallas boutiques which opened in the second half of 2007.
“We expected the positive contribution from toys tied to the summer entertainment properties Batman: The Dark Knight, Speed Racer and Kung Fu Panda,” said Robert Eckert, Mattel’s chairman and CEO. “And we also achieved nice growth in several of our key core brands, including Fisher-Price Core and American Girl. International markets continue to lead the way, but the U.S. business also posted solid performance in the quarter.”
