Mattel’s high-school monsters outshine fading Barbie

Barbie Credit: Facebook
Barbie
Credit: Facebook

Mattel Inc’s quarterly results offered further proof of the fading luster of the iconic Barbie doll, as newer brands including the teen monsters of the company’s own Monster High line gained market share.

Mattel shares fell as much as 8 percent after the world’s biggest toymaker reported a much weaker-than-expected second-quarter profit. Shares of smaller rival Hasbro fell 3 percent.

Sales of Barbie, long the company’s mainstay, fell 12 percent in the second quarter, their fourth straight quarterly decline. Sales of its Other Girls line, which includes Monster High, rose 23 percent.

Sales of American Girl, its popular pre-teen line of chubby faced dolls, grew 14 percent to $78.2 million in the period.

Chief Executive Bryan Stockton said Barbie was “likely being modestly impacted” by the success of the company’s newer franchises.

BMO Capital Markets analyst Gerrick Johnson estimated that Monster High, which depicts the teenage descendants of classic monsters such as Dracula and Frankenstein’s Monster, has annual sales of more than $500 million just three years into its launch.

Barbie, a 54-year-old brand, has annual sales of about $1.3 billion, he said.

Johnson said the company has been offering promotions for Barbie accessories and clothing, indicating waning interest in the brand.

“If kids are playing with a product line a lot, they will want more accessories and fashions for Barbie,” Johnson said. “Accessories are always the first to go.”

However, some analysts said Mattel’s other doll brands were more than offseting Barbie’s decline.

“Barbie is down 7 percent in the first half, and totaled $387 million in the first half. All other girls products (almost entirely dolls) were up 33 percent in the first half, and totaled $622 million,” Needham & Co’s Sean McGowan said.

“So, the total of Barbie plus other girls products was up 14 percent.”

Plunge in profit

Barbie’s weak sales also hurt the company’s profit, which fell 23 percent.

“(Barbie) makes up a higher portion of profits because it has very high gross margins, no royalty expense, and efficient advertising expenditures,” McGowan said.

Total costs rose 9 percent to $505 million in the second quarter as the company geared up for the second half of the year, when it gets about two-thirds of its sales.

Mattel, which also makes Hot Wheels cars and Fisher-Price baby toys, had said it expected spending to be higher this year than last year as it invests in the new franchises, emerging markets and American Girl stores.

The more expensive American Girl line, which Mattel acquired in 1998, is sold through its own stores or through its website, compared with its other brands that primarily sell through retailers such as Wal-Mart, Target or Toys R Us .

Overall sales rose 1 percent to $1.17 billion, missing the average analyst estimate of $1.22 billion.

But, analysts said the company was still doing better than others in the toy industry.

Wells Fargo analyst Timothy Conder said Mattel’s retail share gains appeared to have continued in the United States and five key European markets.

The company’s second-quarter net income fell to $73.3 million, or 21 cents per share, from $96.2 million, or 28 cents per share, a year earlier.

Analysts on average were expecting earnings of 32 cents per share, according to Thomson Reuters I/B/E/S.

Sales at its main Girls & Boys Brands unit, which includes Barbie, rose 1 percent to $792.4 million during the quarter.

“Our girls portfolio continues to be the engine that’s fueling our global growth,” CEO Stockton said about the unit that generates about 40 percent of the company’s revenues.

Sales of toy cars, including the Hot Wheels and Matchbox brands, fell 6 percent, while sales of pre-school brand Fisher-Price fell 3 percent.

The company also increased its share repurchase program by $500 million.

Mattel shares, which have risen 26 percent this year, fell 6 percent to $43.44 in early trading on the Nasdaq. Shares of Hasbro, which is due to report its results on July 22, fell 2 percent to $46.12.



News
Entertainment
Sports
Lifestyle
Local

Gunther from 'Friends' talks Central Perk

We spoke with Gunther (James Michael Tyler) at the preview for new pop-up Central Perk, based on the cafe in "Friends."

Local

Central Perk opens in SoHo

Central Perk, of "Friends" fame, is giving out free coffee in SoHo through Oct. 18.

National

Beer sponsor Anheuser-Busch reproaches NFL over domestic abuse

Anheuser-Busch chastised the NFL for its handling of domestic violence cases, making it the first major advertiser to put pressure on the league.

Local

Sen. Krueger dishes on prospect of legal marijuana…

New Yorkers may see the legalization of recreational marijuana use as early as 2015 if State Senator Liz Krueger (D) gets her way. The Marijuana Regulation and Taxation Act will…

Music

FREEMAN makes Freeman a free man from Ween

For nearly 30 years, Aaron Freeman was known endearingly to his listeners as Gene Ween. But with "FREEMAN," he makes it clear that he's gone somewhere else.

Television

'Outlander' recap: Season 1, Episode 6: 'The Garrison…

Whipping, punching, kicking and a marriage contract. "Outlander" is not for the faint of heart this week with "The Garrison Commander."

The Word

The Word: Hey girl, it's a girl for…

It's a girl for Ryan Gosling and Eva Mendes, who reportedly welcomed a daughter last Friday, according to Us Weekly. The super-private couple managed to…

Television

TV watch list, Tuesday, Sept. 16: 'New Girl,'…

Check out the season premiere of "New Girl," as Jess competes with Jessica Biel for a guy's attentions.

MLB

5 top contenders for NL Rookie of the…

The outing rekindled award talk for deGrom, who appears to hold the top spot for NL Rookie of the Year honors. Metro breaks down a few other contenders.

College

College football Top 25 poll (AP rankings)

College football Top 25 poll (AP rankings)

NFL

Tom Coughlin says Giants 'beat themselves' against Cardinals

Head coach Tom Coughlin, who had a day to cool off and reflect, still sounded like he had a gnawing feeling in his gut.

NFL

Marty Mornhinweg accepts blame for Jets timeout fiasco

Jets fans looking for a scapegoat for Sunday’s timeout fiasco found a willing party on Monday: Marty Mornhinweg.

Style

Rachel Zoe: New York Fashion Week Spring 15

Rachel Zoe goes 'Glam bohemia' for Spring.

Food

Where to find SweeTango apples

Introduced in 2009, SweeTango — a hybrid of Honeycrisp and Zestar — is a sweet apple with plenty of crunch.

Style

London Fashion Week recap

London Fashion week gets in on the action with politics, heritage and summertime living.

Food

Padma Lakshmi's recipe for green mango curry

Padma Lakshmi shares her recipe for green mango curry in UNICEF's new book, "UNICHEF."