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Mattel profit slumps as Barbie's appeal continues to fade
Mattel profit slumps as Barbie's appeal continues to fade
(about 5 hours later)
Mattel, the world's largest toymaker, reported a 23% drop in profit as sales of its doll Barbie decreased for the fourth quarter in a row.
Girls are falling out of love with Barbie. Global sales of the 54-year-old doll fell 12% in the three months to the end of June – the fourth consecutive quarter of declining sales.
Toy sales in mature markets such as the US and Europe have been weak so far this year, but Mattel had previously fared better than its competitors helped by the growing sales of its American Girl and Monster High dolls.
Mattel, the world's biggest toymaker and the home of Barbie since she was invented by American businesswoman Ruth Handler in 1959, said girls were switching their allegiance to less clean-cut dolls, including its Monster High range of goth and ghoulish female characters.
The firm, which also makes Hot Wheels cars and Fisher-Price baby toys, said second-quarter net income fell to $73.3m (£48m), or 21 cents a share, from $96.2 a year earlier.
But Mattel's chief executive, Bryan Stockton, said the company was still committed to Barbie, who "speaks to the aspirational roles that we know girls like to play out". He said Barbie sales, which still make the firm more than $1bn a year, will revive in the runup to Christmas, when it will launch a new range of dolls and accessories.
Analysts on average were expecting earnings of 32 cents a share, according to the Thomson Reuters database.
Analysts say Barbie's US sales have halved since 2000, mostly due to competition from Bratz dolls. Mattel lost a long intellectual property battle with Bratz's owner, MGA Entertainment, in 2011.
Worldwide Barbie sales shrank by 12%. The firm does not break down Barbie sales by market as it is part of the Mattel Girls & Boys Brands unit. Sales at the unit rose 1% to $792.4m during the quarter.
Mattel's total sales rose 1% to $1.17bn, below analysts' average estimate of $1.22bn. The company's shares dropped 7.1% to $43.03.
Sales of American Girl dolls, which Mattel sells through its own stores, catalogue and websites, rose 14% to $78.2m.
Sales of the company's Other Girls brands were up 23%, mainly driven by Monster High dolls.
Most of Mattel's brands in the US sell through retailers like Walmart, Target and Toys R Us.
The toy car business, which includes the Hot Wheels and Matchbox brands, also struggled with sales, falling 6%. Sales of Fisher-Price toys fell 3%t to $396.7m.
Total sales rose 1% to $1.17bn, missing analysts' average estimate of $1.22bn.
Mattel said selling, general and administrative costs as a percentage of net sales rose by 320 basis points, including the impact of an asset impairment charge of 120 basis points. The company added that it increased its share repurchase scheme by $500m
Smaller toy company Hasbro is due to report its results on 22 July.
Mattel shares were unchanged in pre-market trading after closing at $46.33 on Tuesday.
