Mattel profit rises on robust sales and new product lines
Fueled by robust sales of its core brands and new product lines, Mattel Inc. reported a surprisingly strong first-quarter performance Friday.
The world’s largest toymaker posted profit of $24.8 million, or 7 cents a share, compared with a loss of $51 million, or 14 cents, for the year-earlier period. Sales totaled $880.1 million, up 12% compared with $785.6 million a year earlier. In the U.S., first-quarter sales increased 12%.
“I was looking for a really big number and they delivered it, so that was impressive,” said Sean McGowan, a toy analyst at Needham & Co. “I don’t think I’ve ever seen a positive surprise at such a high quality as this. Every component of the income statement came in better, and for good reasons and not some flukey thing. It’s a heck of a good start.”
McGowan said the El Segundo company’s strength came from more high-quality products, increased demand from retailers and consumers willing to spend a bit more on toys after cutting back during the recession.
That was reflected in the company’s sales of core brands. Barbie, which had struggled in recent quarters and is a strong indicator of the company’s performance, was up 5%. Hot Wheels posted a 9% sales gain, Core Fisher-Price toys were up 5% and American Girl brands saw sales rise 6%, the company said.
Chief Executive Robert A. Eckert said in a statement that he was pleased with the toy maker’s performance, especially strong sales of its newest licensed properties including World Wrestling Entertainment and Thomas and Friends.He also said the company was identifying and executing programs “that are generating efficiencies across the organization.” Shares of Mattel were trading up 3% in morning trading.
-- Andrea Chang