Mattel Second-Quarter Revenue Flat Despite 36 Percent Drop in Entertainment Unit Sales
UPDATED: The company cites toys tied to "The Dark Knight Rises" and Disney's “Jake and the Never Land Pirates” as positive factors, but the year-ago period had benefited from a big boost from "Cars 2" product.
Toy giant Mattel on Tuesday cited entertainment merchandise tied to Batman - The Dark Knight Rises and Disney's Jake and the Never Land Pirates as positive factors in its latest earnings report, but overall entertainment product sales dropped 36 percent.
The year-ago period had seen a big boost from toys tied to Cars 2.
The company posted a profit of $96.2 million, up from $80.5 million in the year-ago period.
Revenue of $1.16 billion was unchanged from the same quarter last year, including an unfavorable change in currency exchange rates. North American revenue rose 1 percent, while international revenue declined 1 percent.
Second-quarter Barbie sales rose 5 percent. Fisher-Price Brands sales improved 2 percent, with Mattel citing "strength in Fisher-Price Friends with the addition of the HIT Entertainment portfolio and Disney's Jake and the Never Land Pirates property."
Mattel earlier this year acquired HIT, which includes such brands as Bob the Builder and Thomas the Tank Engine, for $680 million.
"In the second quarter, we delivered solid performance as we continued to build momentum with key brands, such as Barbie, Monster High, American Girl and Hot Wheels, as well as the Batman - The Dark Knight Rises property, despite a continued cautious global retail environment and a strengthening U.S. dollar," said CEO Bryan Stockton. "As we look forward, we remain focused on executing our portfolio of strong brands, countries and customers to deliver in the all-important holiday season."
On a conference call with analysts, management promised the launch of a new girls entertainment property next year and said HIT's animated Mike the Knight has been green lit for a second TV season.
He said the company was also "encouraged" by sales for Disney Princess toy sales tied to Pixar's recent film release Brave, for which it is accounting in its girls segment.
Asked if recent ratings declines of kids TV networks will mean Mattel will get make-good ads, management didn't provide much detail, but Stockton signaled make-goods by saying "we plan to get the same impressions" going forward. The company will work with its media partners to ensure that happens, he said.
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