Showbiz toys hit the mark for Mattel, Hasbro
EmptyFilm and entertainment brand-based toys did well in the first quarter for Mattel, the world's largest toy maker, and No. 2 Hasbro.
However, Hasbro shares jumped 9.8% to $34.65 after hitting a 52-week high of $35.07 intraday, while Mattel's stock plunged 8.2% to $20 as the former beat and the latter missed financial expectations in the traditionally slow post-holiday period.
Hasbro reported a first-quarter profit of $37.5 million, up 14% from a year ago thanks to strong demand for "Transformers" and "Star Wars" toys. Revenue rose 13%, or 9% when adjusting for currency fluctuations, to $704.2 million.
"We had a strong 2007 and the momentum continues into 2008," Hasbro CEO Al Verecchia said.
Amid a slow U.S. economy, Hasbro's domestic revenue edged up only 6% in North America, while its international sales jumped 22%.
Meanwhile, Mattel, the maker of Barbie dolls, swung to a first-quarter loss of $4.6 million from a profit of $12 million a year ago. It was the firm's first loss in three years, and the company cited higher manufacturing costs in China and rising prices for oil and other commodities.
Costs for Mattel's litigation against a former employee and MGA Entertainment over the Bratz doll business also hurt its bottom line. The company charges that a former designer sold designs for the dolls to MGA. Mattel also faced tough comparisons with the year-ago quarter, which benefited from the success of such hot sellers as merchandise related to "Cars."
Mattel's first-quarter revenue declined 2% to $919.3 million, missing the Wall Street consensus estimate. One bright spot, however, was dolls from "High School Musical," which helped drive sales for non-Barbie brands up 16%.
"We are also excited about the introduction of toy lines based on this summer's most anticipated theatrical releases, including 'Speed Racer,' 'Kung Fu Panda,' Batman's 'The Dark Knight' and the American Girl movie 'Kit Kittredge, An American Girl,' " Mattel chairman and CEO Robert Eckert said.