Mattel’s results short of forecasts
Mattel Inc., the world’s largest toy maker, reported lower-than-expected third-quarter results Monday but said it was confident that toys would still be hot items during the upcoming holiday shopping season.
“As I’ve said during past times of high anxiety, my bet is there will be a Christmas,” Mattel Chief Executive Robert A. Eckert told analysts. “That’s not to make light of the concerns, because they’re real.”
Mattel’s third-quarter profit rose less than 1%, to $238.1 million from $236.8 million a year earlier, when the El Segundo company faced unexpected costs related to recalls of toys with lead paint or small magnets that could be harmful if swallowed.
But fewer recalls and a price increase this year couldn’t offset higher costs for commodities, labor and testing, Eckert said. He predicted Mattel would raise prices again next year.
Mattel’s worldwide sales rose 6% to $1.95 billion during the third quarter, aided by strong sales of brands including Batman, High School Musical and American Girl.
Shares of Mattel fell 29 cents, or 2%, to $14.16 Monday.
Sean McGowan, an analyst at Needham & Co., said that although toys were “relatively recession-resilient,” it was difficult to know what to expect during the holidays this year.
The current climate, McGowan said, “is broader than any recession. It’s more global, and it seems to be more consumer-related. Everyone is affected.”
--
