Mattel’s revenues are down by 19%. Toy sales from summer movies and flagship product Barbie and Hot Wheels are down. However, the company reported today that profits are way up. So what explains the profits? Blame a visit from Price Hike Barbie.
The world’s largest toy maker reported a profit of $21.5 million, or 6 cents a share, up from $11.8 million, or 3 cents a share, a year earlier. Revenue fell 19% to $898.2 million, with currency fluctuations accounting for five percentage points of the decline.
Analysts polled by Thomson Reuters most recently were looking for break-even results on revenue of $970 million.
The company doesn’t typically provide financial guidance, but executives said they are on track to generate $90 million to $100 million of net cost savings in 2009 and $180 million to $200 million in savings by the end of 2010. And one advantage Mattel has heading into the critical holiday season that it didn’t have a year ago is that the difficult environment won’t come as a surprise, [Chairman and CEO Robert A.] Eckert said.
No, I suppose a weak holiday season wouldn’t come as a surprise this year.
Mattel 2Q Profit Up; Cost Cuts Offset Weak Sales [Wall Street Journal]
(Photo: Ryan Holloway Photography)