Strong Sales Send Mattel Profit Soaring 73%

Mattel Inc., the maker of Barbie dolls and other toys, said Thursday that strong sales in its three major product lines drove its third-quarter earnings up 73% to $38 million.

The Hawthorne-based company said sales for the three months ending Sept. 30 totaled $410 million, a 34% increase from the same quarter a year earlier.

Mattel said its long-established Barbie dolls and Hot Wheels racing cars led its sales and earnings growth. Mattel was also bolstered by the sale of its Disney character line of toys for infants and preschoolers, said John Amerman, chairman and chief executive. Amerman said Mattel has focused much of its marketing efforts on those three toy lines.

“It takes the volatility out of business when the top sellers do well,” Amerman explained.

The Disney line, introduced by Mattel in 1988, has been a boon for the company, said Barry Rothberg, an analyst at New York-based Mabon, Nugent & Co. Disney sales totaled about $55 million in 1988 and should climb to $125 million this year, Rothberg said.

“Before introducing Disney, they did not have a real presence in the preschool market,” Rothberg said.

Rothberg said Mattel is also benefiting from an industrywide resurgence in the toy market. For example, Hasbro Inc.--another leading toy maker--on Thursday reported a 73.1% increase in third-quarter earnings, Rothberg noted.

“It’s a fairly healthy industry now,” Rothberg said. “Until recently, the industry was losing ground to Nintendo and other video games.”

However, Rothberg said much of Mattel’s third-quarter earnings stems from sales to retailers that are stocking up for the upcoming holiday shopping period.

“The third quarter bodes well for the company,” he said. “But the real test comes in the fourth quarter; that’s when we find out how well consumers like the products.”