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World Warms Up to Barbies Magic
As per the earnings report, domestic sales of Barbie- classic fashion doll, have fallen domestically by 21 per cent in the first quarter. This drop has been in sharp contrast to prior four quarters when the demand had actually risen.
But Barbies fans there is no need to spill your tears, because outside the U.S., Barbie was, in fact, getting more popular. This was reflected in the overseas increase in sales, offsetting the domestic decline. The overseas increase in sales was so much that, overall, sales went up by 2 per cent in most recent quarter.
Reflecting on this Mattel Chairman and Chief Executive Robert A. Eckert said:
I want Barbie to grow every quarter, but we didn’t do that in the U.S. this quarter. While disappointed with shipments in the U.S., we’re encouraged by our international growth
The quarterly results of Mattel, on the whole, were disappointing, eventhough it did manage to perform better in its sales, than what several analysts had expected. Its profits fell 60 per cent in comparison to year-ago-period. Revenue, meanwhile, climbed 19 per cent to $940.3 million, including a 3 per cent benefit from currency exchange rates, compared with $793.3 million in the year-ago period. Earnings per share fell by 5 cents per share from the 2006 period. Eckert, however, believes that the company is off to a good start this year.
Main reason behind fall in sales of Mattels flagship product is the failure of this years fantasy theme for the doll line, christened Fairytopia. It didnt do as well as some of the products rolled out in 2006.
The other units of Mattel had better fortunes and its Wheels unit posted a 15 per cent increase in worldwide gross sales, driven by growth in the Hot Wheels and Matchbox toy lines.
Demand for toys from the Disney/Pixar animated film “Cars” led Mattel’s entertainment-correlation toy business, which posted a sales increase of 59 per cent, including a 4 per cent benefit from currency rates.
Source: marketwatch