Mattel’s profit climbs 6.2%

With Mattel Inc. heading into the most important time of the year for the toy industry, the toy maker reported a 6.2% rise in third-quarter profit and healthy sales increases across several major product lines, including Barbie and “Cars 2" merchandise.

Chief Executive Robert A. Eckert said during a call with analysts Friday that merchants were optimistic about holiday toy sales, though many were “managing their inventories overall pretty tightly.” He said Mattel was “keenly focused” on strengthening its core brands and entertainment properties, expanding its international footprint and building its newest franchise, the Monster High line.

For the third quarter, the El Segundo toy giant reported profit of $300.8 million, or 86 cents a share, compared with $283.3 million, or 77 cents, in the year-earlier quarter.

“We continued to experience strength across our portfolio of brands in all regions of the world,” Eckert said. “Not only have we continued to benefit from the strength of our core brands, but this year’s big entertainment property, ‘Cars 2,’ is also fueling momentum.”


Mattel reported that sales for the quarter were $2 billion, up 9% compared with $1.83 billion for the same quarter last year. In the U.S., sales rose 6% year over year.

Among its major toy lines, sales were up 17% for Barbie, 32% for Mattel’s “other girls brands” such as Disney Princess and Monster High, and 14% for its entertainment business. Mattel’s Fisher-Price Brands unit, which targets younger children, had softer sales, rising 1% to $748.9 million.

Although Mattel’s product costs were higher than expected last quarter, the company has shown widespread strength in product appeal, said Gerrick Johnson, a toy analyst at BMO Capital Markets. Barbie, for instance, has become more relevant to kids in recent years, returning to an aspirational and fashion-forward nature.

“What they’re doing in Barbie, they’re doing across the board,” Johnson said. “There is a lot more innovation, a lot more creativity.”


Still, Johnson said he expected flat sales for the toy industry this holiday season as consumers continue to deal with a sluggish economy.

Shares of Mattel fell 27 cents, or 1%, to $27.51.

Aside from its sales and profit gains, the third quarter was a newsworthy one for Mattel.

In July, company co-founder Elliot Handler, who also invented Hot Wheels, died at age 95 in Century City.


A month later, a federal judge ordered Mattel to pay rival MGA Entertainment Inc. more than $309 million in damages, fees and other costs in the long-running dispute over the billion-dollar Bratz doll line and rejected Mattel’s bid for a new trial. Those decisions came after a Santa Ana federal jury in April sided with MGA and awarded it $100 million in damages. Mattel is expected to appeal the decision.