Mattel’s revenue, profit increase
Toy maker Mattel Inc. said Monday that international demand for its Barbie dolls and its Hot Wheels and Matchbox cars offset domestic declines in the second quarter, sending sales up 6.5%.
Mattel shares rose on the belief that the company’s performance during the period that ended June 30 boded well for the upcoming holiday season.
“There’s some positives and negatives here, but overall, it was in line with expectations,” said Sean McGowan, an analyst at Wedbush Morgan Securities in New York. “That’s a positive in this case because there was a fear that it would be worse.”
Mattel shares rose 67 cents to $27.20.
The company said net income increased 15% to $43.1 million compared with a year earlier. Sales during the period rose to $1.02 billion, up from $957.7 million.
The El Segundo-based toy maker posted a 3% drop in domestic sales overall, with U.S. demand for Barbie dolls down 5%. Worldwide, however, revenue from the company’s biggest product and leading fashion doll was up 6%, the strongest sales for the brand in nearly four years, buoyed by 13% gains internationally.
Analysts had worried that Mattel’s successes last year, particularly with the shaking and giggling T.M.X. Elmo doll and toys based on the movie “Cars,” would make for tough-to-beat sales comparisons.
But the company said sales of its “Cars” toys during the second quarter outpaced sales during the same period a year earlier.
And instead of “Cars” movie toys cutting into demand for the company’s other toy cars, double-digit gains in sales of Hot Wheels and Matchbox cars worldwide sent sales for that division up 20%.
Not all of the company’s products fared so well.
Barbie’s U.S. sales were down for the second quarter in a row.
And sales for its premium American Girls line fell 10%, which the company attributed to fans holding out for the fall release of the newest American Girl, the line’s first historical doll in five years.
What’s more, although sales of the company’s Fisher-Price infant and preschool brands overall were up 12% worldwide, sales of toys based on the popular Nickelodeon character Dora the Explorer were down.
“While not a bad quarter, we do not believe [second-quarter] results were strong enough to send Street estimates higher,” wrote Oppenheimer & Co. analyst Linda Bolton Weiser, who rates the stock “neutral.”
Still, McGowan, who rated the stock “buy,” said he anticipated a strong performance during the second half of the year.
“There are more challenges to the revenue comparisons, but I think they’re up to meeting them,” he said.
