Mattel reports rise in Q2 profit - ToyNews

Mattel reports rise in Q2 profit

Firm announces profit of $21.5 million, up 82 per cent from $11.8 million last year.
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Worldwide sales for the quarter ended June 30th, fell 19 per cent to $898.2 million from $1.11 billion. Domestic sales were down by 12 per cent and international gross sales down 26 per cent.

However the increase in profit was down to cost cutting measures. To reduce costs, Mattel shed 1,000 jobs, shaved corporate travel expenses and cut advertising and distribution costs.

In the past quarter, it cut roughly $91 million of costs in areas such as administration and advertising.

Bob Eckert, chairman and chief executive officer of Mattel said: "In light of the challenging global economy, the quarter's results met our expectations, with revenues negatively impacted largely by our lack of toys based on summer entertainment properties as well as foreign exchange rates.

“That said, we are pleased with our ability to deliver on what is in our control, including tightly managing expenses, which has resulted in improved margins, profitability and cash flow for the quarter."

For the second quarter, worldwide gross sales for the Mattel Girls & Boys Brands business unit were $540.6 million, down 25 per cent year-on-year.

Worldwide gross sales for the Barbie brand were down 15 per cent, driven by lower international sales, but the brand’s retail sales trends continue to be strong.

Worldwide gross sales for other girls brands were down 23 per cent, driven by declines in the High School Musical and Polly Pocket doll lines.

Sales for the Wheels category, which includes the Hot Wheels, Matchbox and Tyco R/C brands, were down 28 per cent, driven primarily by declines in products related to last year's Speed Racer movie.

Sales for the Entertainment business, which includes Radica and Games and Puzzles, were down 32 per cent for the quarter, driven by the lack of toys based on summer entertainment properties compared to last year.

The Fisher-Price Brands business unit, which includes the Fisher-Price Core, Fisher-Price Friends and Power Wheels brands, were $369.9 million, or down 14 per cent versus the prior year, primarily due to declines in Fisher-Price core.

Second quarter gross sales for the American Girl Brands business unit, which offers American Girl branded products directly to consumers, were $61 million, flat versus last year.

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