Toy-maker Mattel Inc. reported 86 percent higher fourth-quarter profit as consumers opened their pocketbooks to snap up toys during the 2009 holiday shopping season.
The El Segundo, Calif.-based company is on the mend after the global recession forced consumers to cut back on discretionary spending. Also, Mattel’s image took a hit after massive recalls related to its Chinese-made toys took place in 2007.
Mattel’s profits of $326 million, or 89 cents a share beat Wall Street analyst estimates and the company forecasted a strong 2010, convinced that the surge in consumer spending is not a fluke.
The company’s surge in sales is primarily due to continued interest in its Barbie line of dolls. Sales of the iconic Barbie dolls rose 12 percent last quarter across the board, including Barbie Fashionistas, “I Can Be” Barbies, and other accessories. Sales of Hot Wheels toys rose by 16 percent in the same period. Sales were flat on Fisher Price and American Girl branded toys.
“We think Mattel will face a difficult selling environment in 2010 but expect momentum at Barbie and Hot Wheels to continue,” analyst Erik Kolb of S&P said in a research note.
The company expects sales to continue to rise as “Toy Story 3” hits theatres in the early summer. It is also introducing new toys related to World Wrestling Entertainment and Thomas the Tank Engine.
Regarding Venezuela’s devaluation of its currency, Mattel CFO Kevin M. Farr said on a conference call with analysts on Friday that Venezuela only accounts for 3 percent of its global sales volume.
“As I have said throughout the past year, companies that deliver improved execution during the tough times will be the ones best positioned to capitalize on the economic turnaround which will most certainly occur,” CEO Robert Eckert said on the call.
Consumer spending was markedly up in the recent holiday shopping season as the U.S. economy emerges from the deepest recession since the Great Depression. Toys ’R Us stores reported last week that December same-store sales were up almost 5 percent.
But shares of Mattel (NYSE: MAT) fell on Friday afternoon trading as investors were worried about higher labor costs that could reduce the company’s margins. Shares dropped 32 cents (1.6 percent) to $19.72.
The El Segundo, Calif.-based company is on the mend after the global recession forced consumers to cut back on discretionary spending. Also, Mattel’s image took a hit after massive recalls related to its Chinese-made toys took place in 2007.
Mattel’s profits of $326 million, or 89 cents a share beat Wall Street analyst estimates and the company forecasted a strong 2010, convinced that the surge in consumer spending is not a fluke.
The company’s surge in sales is primarily due to continued interest in its Barbie line of dolls. Sales of the iconic Barbie dolls rose 12 percent last quarter across the board, including Barbie Fashionistas, “I Can Be” Barbies, and other accessories. Sales of Hot Wheels toys rose by 16 percent in the same period. Sales were flat on Fisher Price and American Girl branded toys.
“We think Mattel will face a difficult selling environment in 2010 but expect momentum at Barbie and Hot Wheels to continue,” analyst Erik Kolb of S&P said in a research note.
The company expects sales to continue to rise as “Toy Story 3” hits theatres in the early summer. It is also introducing new toys related to World Wrestling Entertainment and Thomas the Tank Engine.
Regarding Venezuela’s devaluation of its currency, Mattel CFO Kevin M. Farr said on a conference call with analysts on Friday that Venezuela only accounts for 3 percent of its global sales volume.
“As I have said throughout the past year, companies that deliver improved execution during the tough times will be the ones best positioned to capitalize on the economic turnaround which will most certainly occur,” CEO Robert Eckert said on the call.
Consumer spending was markedly up in the recent holiday shopping season as the U.S. economy emerges from the deepest recession since the Great Depression. Toys ’R Us stores reported last week that December same-store sales were up almost 5 percent.
But shares of Mattel (NYSE: MAT) fell on Friday afternoon trading as investors were worried about higher labor costs that could reduce the company’s margins. Shares dropped 32 cents (1.6 percent) to $19.72.
