Barbie leads Mattel to fourth-quarter profit surge
Strong Christmas sales of Barbie and other toys helped push Mattel Inc.'s fourth-quarter profit up 86% compared with the same period a year earlier, the nation’s largest toy maker said.
The El Segundo company has been working to rebuild its performance after months of frugal consumer spending. Its image also took a hit after a spate of high-profile recalls in 2007 related to excessive levels of lead and harmful magnets.
A year ago, Mattel said it would aggressively cut costs and improve its supply chain; on Friday, Chief Executive Robert A. Eckert said those moves bolstered the company’s fourth-quarter and full-year results.
“In 2009, we improved execution across the company,” Eckert said in a statement. “Despite the challenging economic environment, we were pleased with the holiday performance of many of our classic and time-honored brands.”
For the quarter that ended Dec. 31, sales totaled $1.96 billion, a 1% year-over-year increase from $1.94 billion. The company said it earned $328.4 million, or 89 cents a share, compared with profit of $176.4 million, or 49 cents, in the year-earlier quarter.
“In general, it was very good news for Mattel today,” said Margaret Whitfield, a toy analyst at Sterne Agee who said she expected the company’s 2010 performance to be even better. “The core products that we were most concerned about performed very well.”
Analysts said they were cheered by the revitalization of the Barbie brand, which had struggled for several quarters as shoppers turned to other toys. Sales of Barbie were up 12% during the fourth quarter and sales of Hot Wheels rose 16%, the company said.
“Barbie is back,” Whitfield said. “There’s a lot more depth to the product and it’s much more attractively packaged and positioned than before.”
Mattel’s Fisher-Price Brands, however, reported weaker results.
For the fourth quarter, sales for the business unit, which includes the Fisher-Price, Little People and Power Wheels brands, were $729.7 million, down 3%. For the year, sales totaled $2.17 billion, down 8%.
For the full year, Mattel’s sales fell 8.3%, to $5.43 billion from $5.92 billion a year earlier. Profit was $528.7 million, or $1.45 a share, a 39.3% increase from profit of $379.6 million, or $1.04, in 2008.
Shares of Mattel fell 32 cents, or 1.6%, to $19.72 on Friday.