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Mattel Announces Q4 Earnings, 2012

Main News … From the Press Release

Fourth Quarter Highlights

Worldwide net sales up 5% from the prior year;
North American1 gross sales up 5% and International gross sales up 8%;
Worldwide gross sales for core brands: Barbie® down 4%; Hot Wheels® up 2%; Fisher-Price® up 6% and American Girl® up 13%.

Full-Year Highlights

Worldwide net sales up 2% from the prior year;
North American gross sales up 2% and International gross sales up 4%;
Worldwide gross sales for core brands: Barbie down 3%; Hot Wheels up 2%; Fisher-Price up 4%; and American Girl up 11%.

“We had another great year at Mattel with record sales for both total company and our International division, stronger gross margins and our second year of more than $1 billion in operating profit,” said Bryan G. Stockton, chairman and chief executive officer of Mattel. “These results are particularly gratifying given the challenging global economic and cost environment.”

The really big news? Monster High now a $1 Billion dollar brand.

The big news in the fourth quarter and in 2012 is that Monster High continues to exceed all expectations, becoming a truly global property, with revenue larger in international now than in North America, just like Barbie. In 3 short years, Monster High has become a $1 billion brand at retail and does not seem to be slowing. Even more amazing is that during that same time period, its growth has been almost purely incremental to our portfolio, with Barbie sales higher in 2012 than they were when Monster High was launched in 2010. In fact, according to NPD, Monster High ended the year as the #2 doll property in the world, behind only Barbie.

Via the conference call – available on Seeking Alpha (signup required).

CARS?

(4th Quarter) … Worldwide gross sales for the Entertainment business, which includes Radica® and Games, were down 13% for the quarter, primarily driven by decreases in the CARS 2® movie property.

(For the Year) … Worldwide gross sales for the Entertainment business, including Radica and Games, were down 21%, primarily driven by decreases in the CARS 2 movie property.

It’s kind of hard to tell how much CARS really contributed to the down side of the Entertainment Division as it encompasses other brands which probably had a good year such as Disney Princesses or decent sales with Batman – other parts of the division were probably not great contributors but probably down by just a little such as DC or Toy Story. And Mattel is smart as they’ve never actually announced what the Entertainment Division actually does in sales so they can tout great years, talk up good years and brush off poor years and give out numbers like 13% or 21% percent but there’s no real context but it should be noted that they no longer use the phrase “evergreen” around Disney Pixar CARS.

But clearly the accounting department finally moved the CARS numbers from the receivables side to the markdown side after all this time. Remember as late as last Spring, they were touting the great year they had with CARS 2 which were sales in the sense they pushed it out to retail but then of course, there was a HUGE dropoff in sales as retailers didn’t really need anymore inventory.

But eventually you have to pay the piper – I guess they were hoping there was some mis-shapen demand just waiting to buy these off the pegs and things would normalize but eventually you have to break down and write it off as a lost cause – philosophically, technically and accounting wise.

What was on the books as $3.00ish wholesale revenue was probably changed to about $.25 to $.40 … per …

Or you try and lessen the pain by making a little more by selling it yourself …

So, it’s hard to tell how much CARS is really down but no real shocker it’s down …

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5 Comments

  • Jinzo says:

    Better case assortments might work if there were nothing on the pegs. They need to clean up their trash from the pegs first to make room for new cases. That’s the first step towards solution to the problem and then they should worry about case assortments. Oh and that spin out/stunt trash is just a waste of resources and space for most of us :-(

  • carslover says:

    just think how much profit mattel could be making if they produced the diecast cars collectors want rather than overproducing the main characters everybody already has

  • cac1959 says:

    Better case assortments would definitely have helped… I went to 12 stores in the Dayton (Ohio) area yesterday and bought nothing… One Target had one 7 pack with Kit Revster.

    They also need to listen to the collector… I (and others) don’t want to see plastic water toys or stunt racers… I even saw a Shu Todoroki Rev Up for the first time at one Meijer… $14.99… saw the same thing at a TJ Maxx for $9.99 and left it.

    Send stores Cars we want to buy and merchandise will sell.

  • John in Missouri says:

    I saw a quote where Mattel cited a lack of demand for Cars 2 merchandise. I think they should look themselves in the mirror and admit that it was an overabundance of pegwarmers!

  • Fillmore1234 says:

    Not surprising. I wish Mattel would have added that it was ALL THEIR FAULT (along with the retailers that ordered way too many Cases in the first place)

    All Mattel needed to do was make better Case assortments and then the whole problem would have been solved. 1 or 2 New Cars in a Case of 24 is almost like they were hoping that this would happen. And having 3 or more Finn McMissiles and Lightning McQueens in each Case didn’t help sales either. Hopefully the 2013 year shows signs of Mattel listening to our pleas so we don’t have to go through 2011 and 2012 again.

    I wonder how much worse 2012 Cars 2 sales would have been if it weren’t for Cases N and P?

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