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Mattel's sales, income dip in Q3

By Staff -- Gifts and Dec, 10/16/2009 8:48:00 AM

EL SEGUNDO, Calif.—Mattel reported today that its third quarter net income slipped approximately 3 percent compared to 2008 following an 8 percent decline in net sales.

For the period, the toymaker’s net income was of $229.8 million, or $0.63 per share, compared to last year’s third quarter net income of $238.1 million, or $0.65 per share. Worldwide net sales were $1.79 billion, down from $1.95 billion last year, including unfavorable changes in currency exchange rates of 3 percentage points.

On a regional basis, third quarter gross sales decreased 2 percent in the U.S. and fell 14 percent in international markets, including unfavorable changes in currency exchange rates worth 5 percentage points.

“As expected, revenues continue to be challenging this year due to the overall economic environment, retailers tightly managing inventory, foreign exchange rates and the lack of entertainment-inspired toy lines,” said Robert A. Eckert, Mattel's chairman and CEO. “That said, we are continuing to make strong progress on reducing costs, rebuilding margins and generating strong cash flow.”

Operating income for the quarter was $336.5 million, up from the prior year’s operating income for the quarter of $315.3 million.

Both of Mattel's primary business units saw gross sales declines, while its American Girl Brands business achieved a modest gain.

Mattel Girls and Boys Brands business saw worldwide gross sales dip 10 percent during the quarter to $1.08 billion. Among the unit’s product segments:

• Worldwide gross sales for its Barbie brand declined 8 percent compared to last year, with essentially flat domestic sales offset by international declines.

• Worldwide gross sales for Other Girls Brands were down 19 percent, driven primarily by declines in sales of High School Musical and Polly Pocket toys, partially offset by higher sales of Little Mommy and Disney Princesses toys in the U.S.

• Worldwide gross sales for the Wheels category, which includes the Hot Wheels, Matchbox and Tyco R/C brands, were down 3 percent.

• Worldwide gross sales for the Entertainment business, which includes Radica and Games and Puzzles, declined 15 percent for the quarter, mostly attributable to lower sales of Radica and toys geared to last year’s summer entertainment properties, partially offset by worldwide sales of toys supporting Disney/Pixar’s Toy Story and Toy Story 2, along with stronger U.S. sales of Disney/Pixar Cars related product.

Fisher-Price Brands’ third quarter worldwide gross sales slipped 6 percent to $784.8 million, primarily due to declines in Fisher-Price Core and Fisher-Price Friends domestically.

American Girl Brands tallied a 4 percent gain in gross sales, to $82.4 million, helped by the opening of new boutique stores in Boston and Minneapolis.

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