HIT acquisition, Barbie sales dip affect Mattel’s Q2
EL SEGUNDO, Calif. — Mattel reported net income of $73.3 million for the second quarter ended June 30, a 23% decrease from $96.2 million for the same period last year.
The dip in profits reflects, in part, investments the company has made, such as its acquisition of HIT Entertainment, as it positions itself for future growth, according to chairman and CEO Bryan G. Stockton.
“Overall, our underlying performance in the first half of the year is consistent with our long-term financial goals for sales and operating profit growth,” said Stockton. “While we delivered another quarter of sales growth and strong gross margins, lower profits in the second quarter reflect an asset impairment charge and strategic investments made to support consistent future growth. As we look to the second half of the year and the all-important holiday season, we are excited by the innovative product, entertainment and retail programs planned and we remain focused on leveraging our industry leading portfolio of strong brands, countries and customers.”
For the quarter, net sales were $1.17 billion, up 1% from $1.16 billion for the same period last year, with no impact from changes in currency exchange rates. On a regional basis, second quarter gross sales decreased 2% in the North American region, which consists of the U.S., Canada and American Girl, with no impact from changes in currency exchange rates. In the international region, gross sales increased 4%, with no impact from changes in currency exchange rates.
For the second quarter, worldwide gross sales for Mattel Girls & Boys Brands were $792.4 million, up 1% from $781.6 from the same period last year. Worldwide gross sales for the Barbie brand were down 12%. Worldwide gross sales for Other Girls brands were up 23%, primarily driven by Monster High. Worldwide gross sales for the Wheels category, which includes the Hot Wheels, Matchbox and Tyco R/C brands, were down 6%. Worldwide gross sales for the Entertainment business, which includes Radica and Games, were flat versus the prior year.
Second quarter worldwide gross sales for Fisher-Price Brands, which includes the Fisher-Price Core, Fisher-Price Friends and Power Wheels brands, were $396.7 million, down 3% versus the prior year.
Second quarter gross sales for American Girl Brands, which offers American Girl-branded products directly to consumers, were $78.2 million, up 14% versus the prior year, driven by strong sales of Saige, the 2013 Girl of the Year, and Caroline, the newest historical character.
Mattel’s portfolio of brands includes Barbie, Hot Wheels, Monster High, American Girl, Thomas & Friends and Fisher-Price brands, including Little People and Power Wheels, as well as a wide array of entertainment-inspired toy lines. With worldwide headquarters in El Segundo, Calif., Mattel employs approximately 30,000 people in 40 countries and territories and sells products in more than 150 nations.