Mattel Has a Lousy Quarter – Financial Numbers Down
From the transcript & press release:
- Worldwide net sales down 6% from the prior year;
- North American1 gross sales down 10% and International gross sales were flat to last year;
- Worldwide gross sales for core brands: Barbie® down 13%; Hot Wheels® down 8%; Fisher-Price® down 13% and American Girl® up 3%;
- Mattel Girls & Boys BrandsFor the fourth quarter, worldwide gross sales for the Mattel Girls & Boys Brands business unit were $1.35 billion, down 4% versus a year ago. Worldwide gross sales for the Barbie brand were down 13% and worldwide gross sales for Other Girls Brands were up 12%, primarily driven by Disney Princess™.
- Worldwide gross sales for the Wheels business, which includes the Hot Wheels, Matchbox® and Tyco R/C® brands, were down 11% for the quarter. Worldwide gross sales for the Entertainment business, which includes Radica® and Games, were down 6% for the quarter, driven by lower sales of Radica and Games, partially offset by the Disney Planes™ movie property.For the year, worldwide gross sales for the Mattel Girls & Boys Brands business unit were $4.32 billion, up 3% versus a year ago. Worldwide gross sales for the Barbie brand were down 6% for the year. Worldwide gross sales for Other Girls Brands were up 25% for the year, primarily driven by Monster High®. Worldwide gross sales for the Wheels business, which includes the Hot Wheels, Matchbox and Tyco R/C brands, were down 8% for the year. Worldwide gross sales for the Entertainment business, including Radica and Games, were flat for the year, primarily driven by the Disney Planes movie property, offset by decreases in Radica and Games.
” … For Mattel, unlike prior years, our product innovations and our marketing programs were not strong enough to drive growth for our core categories like dolls, infant, preschool and vehicles.
… Shifts in sales between categories are normal for the toy business and 2013 was no different. Unfortunately for Mattel, during the holiday period, U.S. NPD results showed the key categories we play in, dolls, infant preschool and vehicles, performed below the industry average.
As I said earlier, our Mattel-owned inventories are higher, and retail inventories are slightly higher. We need to work through pockets of inventory that vary by brand and market.
Second, as you look at our balance sheet, what stands out is that Mattel-owned inventory is up 22% or about $100 million. While some of the increase in inventory is a result in rising cost, we finished the year with more inventory than planned since we did not meet our sales objectives for the fourth quarter. As we go forward, we expect to optimize the disposition of most of these inventories during the first few quarters of the year. As a result, we expect to have higher inventory balances throughout 2014.
… You can see that our worldwide gross sales were down 6% for the quarter … Worldwide sales for Fisher-Price brands were down 13% for the quarter and 6% for the year.
… As expected, we did not — we did experience a decline in Cars 2 sales as consumers were introduced to Planes.”
You can read the transcript of the conference call with analysts at Seeking Alpha.
You can view the press release HERE.
Or the PDF of the presentation HERE.
On the other hand, they raised the dividend so the yield is higher (especially with the stock price drop) so if you’re not counting on Mattel’s stock pricing going up by much, at least you get a nicer dividend yield.
6 February 2014
6 Comments
They would not have had a dip in Cars 2 sales when customers were introduced to planes had they had anything worth buying on the pegs at that time. Most of us got interested in Planes to fill the Cars2 void.
Monster High wasn’t going to carry Mattel forever…
“during the first few quarters of the year”… exactly how many quarters does Mattel think there are in a year?
I read all this Mattel owned inventory to mean there are probably a LOT of old Cars sitting in their warehouses.
Convoy brothers for one set
Pulling inventory won’t help, the report says they had $100 Million in inventory they owned * already * in their warehouses. Even at $10 per Cars diecast, that would equal ten million diecasts! Ouch.
Furthermore, look at those totals. 4th Quarter sales were 1.35 Billion — and the full year numbers were $4.3 Billion or so. That’s a boatload of toys, and one reason why Mattel doesn’t care about collectors all that much in the long run — we simply do not effect their bottom line. If every member here bought $1,000 a year from Mattel, that’d still only be $20 Million — or less than .005% of their annual gross sales worldwide. We’re a niche of a niche of a niche.
Just did some more accurate math. This site claims 25,567 registered members, I’ll round up to 30,000 to add in some gawkers. If each one of them was a die-hard Cars collector, and spent $2,000 a year on Mattel products, that would be $60 Million in sales. At that rate then we’d be just over 1% of Mattel’s annual sales (.0139%).
I am under no illusions that even a tenth of this site’s members buys $2K per year in “Cars” products.
But, had they not flooded the market with Finn, Francesco, Holley, Mater, and various iterations of LMQ, and made a variety of other cars, maybe they would sell more. Add in their lackluster distribution system, and then maybe they could rein in a massive inventory, and get their bottom line bolstered.
4th quarter sales down? It’s no wonder when so many stores have Cars inventory that’s goes back to May 16, 2011… Mattel needs to get reps to all stores and pull non-selling inventory, whether it’s Cars, Hot Wheels, or other products.