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Mattel profits in '09 despite sales decline

By Staff -- Gifts and Dec, 1/29/2010 11:26:00 AM

EL SEGUNDO, Calif.—Mattel reported significant net income growth for the fourth quarter and for 2009 overall despite an 8 percent drop in total annual sales.

For the quarter, the toymaker reported net income of $328.4 million, or $0.89 per share, up from last year’s $176.4 million, or $0.49 per share. For the year, the company recorded net income of $528.7 million, or $1.45 per share, compared to last year’s net income of $379.6 million, or $1.04 per share.

“In 2009, we improved execution across the company by realigning our infrastructure; controlling costs and expenses; tightly managing working capital; and reducing capital spending. The result was improved profitability, a stronger balance sheet and increased cash flow,” said Robert A. Eckert, Mattel’s chairman and CEO. “Despite the challenging economic environment, we were pleased with the holiday performance of many of our classic and time-honored brands, including Barbie and Hot Wheels.”

For the quarter, net sales rose 1 percent to $1.96 billion, helped by the favorable impact from currency exchange rates worth 4 percentage points. On a regional basis, fourth quarter gross sales were down 2 percent in the U.S. and were up 3 percent in international markets, which included a positive impact from changes in currency exchange rates of 8 percentage points.

Operating income for the quarter was up 80 percent to $417.4 million.

For the year, net sales were $5.43 billion, an 8 percent decline that included an unfavorable impact from changes in currency exchange rates of 2 percentage points. On a regional basis, full-year gross sales were down 4 percent in the U.S. and were down 13 percent in international markets, which included an unfavorable impact from changes in currency exchange rates of 4 percentage points.

Operating income for the year was $731.2 million, up 35 percent compared to the prior year.

Sales results for the company's three business units—Mattel Girls & Boys Brands, Fisher-Price Brands and American Girl Brands—were mixed.

The Mattel Girls & Boys Brands business unit saw worldwide gross sales grow 4 percent to $1.16 billion, helped by a 12 percent jump in worldwide gross sales for the Barbie brand and hampered by a 17 percent decline in gross sales for its Other Girls Brands. Worldwide gross sales for the Wheels business, which includes the Hot Wheels, Matchbox and Tyco R/C, rose 11 percent. Worldwide gross sales for the Entertainment business, which includes Radica and the Games and Puzzles business, gained 2 percent for the quarter.

For the year, worldwide gross sales for the Mattel Girls & Boys Brands business unit slipped 10 percent to $3.29 billion. Worldwide gross sales for the Barbie brand were down 3 percent for the year while sales for Other Girls Brands were down 20 percent. Worldwide gross sales for the Wheels business were down 7 percent. Worldwide gross sales for the Entertainment business, including Radica and Games and Puzzles, were down 14 percent.

Fisher-Price Brands

Fourth quarter worldwide gross sales for the Fisher-Price Brands business unit, which includes the Fisher-Price, Little People, and Power Wheels brands, were off 3 percent to $729.7 million. For the year, worldwide gross sales for the Fisher-Price Brands business unit were $2.17 billion, down 8 percent.

American Girl Brands had flat gross sales, worth $253 million, for the fourth quarter. For the year, gross sales were flat at $462.9 million.

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