) first-quarter 2013 earnings of 11 cents per share beat the
Zacks Consensus Estimate by 37.5% and were considerably higher
than the year-ago earnings per share of 2 cents. Year-over-year
increase in net sales combined with lower costs led to the growth
During the quarter, net sales grew 7.0% year over year to
$995.6 million, despite unfavorable impact of currency
translation. The American Girl line was the major contributor to
sales growth. Revenues also edged past the Zacks Consensus
Estimate of $983.0 million.
Worldwide gross sales were $1.1 billion, up 7.0% year over
year. Gross sales from North America (including the U.S., Canada
and American Girl) increased 5% year over year while
international gross sales leaped 9.0% year over year, despite an
adverse currency impact of 2 percentage points.
Mattel's product segments comprise Mattel Girls & Boys
Brands, Fisher-Price Brands and American Girl Brands.
Gross sales at
Mattel Girls & Boys Brands
increased 11% year over year to $692.2 million. Barbie sales were
down 2%. However, Other Girls Brands sales shot up 56% buoyed by
the Monster High brand.
Gross sales of the Wheels business, which consists of the Hot
Wheels, Matchbox and Tyco R/C brands, slipped 2%. Sales from
Entertainment business nudged up 1%.
unit,which includes Fisher-Price Core, Fisher-Price Friends and
Power Wheels brands
slumped 7% to $287.3 million hurt by Fisher-Price Core brand.
Led by Saige, the
American Girl Brands
leaped 32% to $100.5 million, powered by sound business in all
core doll segments. A solid retail performance also boosted the
Gross margin expanded 320 basis points (bps) year over year to
54.2% while operating margin grew 350 bps to 6.6%. Lower cost of
sales had a positive impact on gross margin. Operating margin
benefited from lower selling and administrative expenses and flat
advertising expenses ratio.
Following its lower-than-expected performance last quarter,
Mattel turned around this time by beating both top-and
bottom-line estimates by wide margins. The company's strong
performance especially in debt-ridden Europe deserves a special
Management expects the top line to improve in 2013 and beyond
with strong momentum in the girls segment, Hot Wheels in the boys
business as well as Thomas and Friends brands in the Fisher-Price
However, increasing input costs and a tough retail environment
remain the areas of concern. Moreover, persistent sluggishness in
its powerhouse brand Barbie also remains an overhang. Mattel
currently carries a Zacks Rank #3 (Hold).
Some other toy companies which will likely report their
earnings in coming days are
LeapFrog Enterprises Inc.
Activision Blizzard Inc.
). Hasbro is slated to report on Apr 22 while LeapFrog and
Activision Blizzard will likely report on May 2 and May 6,
ACTIVISION BLZD (ATVI): Free Stock Analysis
HASBRO INC (HAS): Free Stock Analysis Report
LEAPFROG ENTRPS (LF): Free Stock Analysis
MATTEL INC (MAT): Free Stock Analysis Report
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