Cars helps Mattel profits soar
toy manufacturers' sales jumped by 59% in first quarter
Mattel Inc. sure loves those Cars. Merch from the Disney/Pixar flick put the toy company's profits in overdrive.
(Source: www.bcdb.com)
Toy manufacturer Mattel Inc. announced Monday that their movie-related division pulled a stunning 59% sales increase over their first quarter. Strong demand for toys based on the Disney/Pixar film Cars, plus a 4% benefit from currency rates, were responsible for the jump.
Mattel's revenue was up 19% to $940.3 million, compared with $793.3 million in the same period a year earlier, the company announced Monday. International sales grew by 29%, while domestic sales jumped by 10%.
Although Mattel's overall profits were down 60% from a year ago, the company's sales exceeded Wall Street analysts' predictions. Last year's profits also got a boost from a $57 million foreign tax settlement.
Mattel's first-quarter earnings dropped to $12 million (3 cents per share), down from $30.2 million (8 cents per share) during the same period last year.
Revenue from toys related to John Lasseter's animated movie even made up for a sales slump in one of Mattel's classic toys: Barbie sales dropped 21% last year in North America, but went up 20% internationally. Overall, that meant the fashion icon's sales jumped 2% worldwide.
"I want Barbie to grow every quarter, but we didn't do that in the U.S. this quarter," said Mattel chairman and CEO Robert Eckert. He pointed to declining shelf space in toy stores as a factor in Barbie's sales slump.
"I don't think that was, in my opinion, the big driver of our decline, but it clearly worked against us," Eckert said in a conference call with Wall Street analysts. "Certainly when we go into this fall, when it really counts, we're working hard to make sure that's not the case."
"Our portfolio of brands maintained the momentum from the holiday season, with strong performances from both Fisher-Price core and Fisher-Price Friends," said Eckert. Gross sales of Fisher-Price products (such as the T.M.X. Elmo doll) went up 27% worldwide, and American Girl toy sales increased by 2%.
Disney's other movie-related merchandise lines were good for Mattel as well. Sales of Disney Princess swag, as well as Poly Pocket! toys, helped offset the drop in Winx and Pixel Chix toys sales. Sales of My Scene and Magic of the Rainbow lines stayed static over the course of the year. Overall, worldwide sales of Mattel's Other Girls product line dropped by a factor of 8%.
Boys' toys fared a bit better. Strong sales of Matchbox and Hot Wheels merch helped Mattel's Wheels line gain a worldwide 15% increase.
During afternoon trading, Mattel shares fell 29 cents to $28.05 per share on the New York Stock Exchange.
