Mattel Inc.'s (MAT) third-quarter earnings jumped 22% as the toy
maker saw sales growth across all its segments, while margins also
widened.
Results beat Wall Street expectations.
The largest U.S. toy maker by revenue has recently been notching
sales growth across nearly all categories, and Chief Executive
Bryan Stockton previously noted that the company is building
momentum with important brands like Barbie and Hot Wheels. Mattel
has also had a recent hit with the Monster High doll line, a brand
it built in house that has since grown to become the second-most
popular fashion doll after Barbie, according to NPD data.
Earlier this week however, Goldman Sachs lowered its estimates
on Mattel and cut rival Hasbro Inc. (HAS) to sell from neutral,
citing "accelerating" declines in per capita toy spending in the
US, and noting that it is cautious on the toy sector.
Tuesday, Mr. Stockton noted that Mattel's third-quarter
performance "represents another quarter of building momentum in the
marketplace through share gains and strong shipments across our
portfolio of brands and countries." However, he also issued a
caveat: "That said, with the holidays still in front of us, we
remain focused on executing our business and driving retail sales
in the all-important holiday season."
For the most recent quarter, Mattel reported a profit of $365.9
million, or $1.04 a share, versus a year ago profit of $300.8
million, or 86 cents a share.
Net sales were $2.08 billion, a rise of 4% including an
unfavorable change in currency exchange rates of 3 percentage
points.
Analysts polled by Thomson Reuters had most recently forecast
earnings of 99 cents on revenue of $2.07 billion.
Gross margin widened to 53.7% from 47.8% even as advertising and
promotion expenses rose 6.8% and other selling and administrative
expenses rose 16%.
Sales of Mattel's girls and boy brands unit--its biggest arm and
the one that includes Barbie and Hot Wheels--rose 2.8% to $1.37
billion. Barbie gross sales were down 4%, while Hot Wheels sales
were flat. Meanwhile, Fisher-Price gross sales were up 5.5% to
$790.4 million and American Girl rose 16% to $102 million.
Mattel said its North American gross sales were up 6%, while
international gross sales climbed 2% including an unfavorable
impact of currency exchange rates of nine percentage points.
Shares closed Monday at $35.42 and were inactive in recent
premarket trading. The stock is up 29% in the past year.
Write to Saabira Chaudhuri at saabira.chaudhuri@dowjones.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires