Mattel Sees Growth in Int'l Markets

Toy company saw a sales bump in international markets in Q2, Cars 3 drove sales in the entertainment category.

GLOBAL–Mattel reported a 2 percent increase in net sales worldwide and 1 percent increase in gross sales worldwide in Q2, compared to the same period last year.

Despite overall gains worldwide, net sales in North America decreased by 3 percent and gross sales decreased by 2 percent. On the international front, net sales increased 8 percent and gross sales increased 6 percent.

The company’s gross margin for the quarter decreased 430 basis points, driven priarily by higher royalty expenses, an unfavorable product mix, lower licensing income and higher product costs.

For Mattel’s girls and boys brands, worldwide gross sales for the quarter were $609.9 million, up 10 percent compared to 2016. However, worldwide gross sales for Barbie were down 5 percent and worldwide gross sales for other girls’ brands were down 28 percent, driven by declines in Monster High and Ever After High.

Worldwide gross sales for the Wheels category were down 6 percent, and worldwide gross sales for the entertainment business were up 58 percent, primarily driven by sales of Cars 3 merchandise.

For Fisher-Price brands–which includes Fisher-Price Core, Fisher-Price Friends and Power Wheels–worldwide gross sales were $335 million, down 3 percent versus 2016. Worldwide gross sales for American Girl were also down 6 percent to $64 million.

Finally, for Mattel’s construction and arts and crafts brands, which includes Mega Bloks and RoseArt, worldwide gross sales were $53 million, down 27 percent. This was primarily driven by declines in Mega Bloks licensed products.

Additionally, Mattel’s operating loss for the quarter was $48.7 million, compared to $11.7 million in the second quarter 2016. Meanwhile, adjusted operating loss for the quarter was $40.1 million, compared to the 2016 second quarter adjusted operating income of $6.2 million.

“Our key power brands–Barbie, Hot Wheels and Fisher-Price–continued to show strength at retail in the second quarter,” says Margo Georgiadis, chief executive officer, Mattel. “In addition, we are moving quickly to activate the strategy that we outlined in June to future-proof Mattel and deliver enhanced, sustainable growth over the medium-term.”

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