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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).


(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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