Mattel sales fall as Barbie stumbles again
Mattel Inc, the world's largest toymaker, reported its third straight fall in quarterly revenue as sales for the iconic Barbie doll declined the most since mid-2009.business Updated: Jul 17, 2014 19:12 IST
Mattel Inc, the world's largest toymaker, reported its third straight fall in quarterly revenue as sales for the iconic Barbie doll declined the most since mid-2009.
Shares of the company, which also makes Fisher-Price toys and Hot Wheels toy cars, fell about 10% before the bell.
The company's push into new toys such as building blocks has so far not helped it overcome the fall in demand for its decades-old toys as children shift to electronic games and tablets.
Barbie sales, which fell 15% in the second quarter ended June 30, have declined in eight of the past 10 quarters.
Analysts estimate the doll contributes more than $1 billion to the company's annual sales, or about 15% of total sales in 2013. Mattel does not break out Barbie sales separately.
Excluding Barbie, sales of girls dolls fell 11%, mainly due to weak demand for Monster High dolls, which were launched in 2010 and are based on the children of monsters such as Dracula.
Fisher-Price sales declined 17%.
Mattel acquired Canada's Mega Brands Inc in April for $423 million to enter the high-growth building blocks toy market that is dominated by Denmark's Lego.
Mattel's lower revenue also reflected higher retail inventories, Stifel Nicolaus analyst Drew Crum wrote in his note.
Mattel's inventories have been rising after the company faced one of its weakest holiday quarters last year. Inventories rose 36% from the March quarter to $885.4 million.
Net income more than halved to $28.3 million, or 8 cents per share from $73.3 million, or 21 cents per share, a year earlier.
The earnings included a 11 cent per share tax benefit and the negative impact of 6 cents per share from costs related to the acquisition of Mega Brands.
Excluding these items, Mattel earned 3 cents per share.
Worldwide net sales fell 9% to $1.06 billion, including $61.6 million in sales from Mega Brands. This is the first time Mattel has included sales from Mega Brands in its results.
Mattel's sales in North America, which accounts for half of the company's total revenue, fell 8%. International sales fell 9%.
Analysts on average had expected a profit of 18 cents per share on revenue of $1.19 billion, according to Thomson Reuters I/B/E/S.
Mattel's shares closed at $39.03 on the Nasdaq on Wednesday. The stock has fallen about 18% so far this year.