Mattel Tops Estimates with Help from American Girl Brand

Andrew Klips |

Mattel Tops Estimates with Help from American Girl BrandMattel Inc. (MAT), the maker of iconic toys like Barbie dolls and Hot Wheels cars, reported profits for the third quarter that topped analysts’ predictions, thanks in part to keeping its costs under control and increased sales of American Girl.

During Q3, sales increased to $2.08 billion, ahead of analyst expectations of $2.07 billion. Net income rose to $365.9 million, or $1.04 per share, from $300.8 million, or 86 cents a share, in the year prior quarter. Wall Street was calling for net income of 99 cents per share.
The cost of sales fell by 8 percent to $962.4 million during the quarter, according to the world’s largest toy company. Sales for Barbie products dipped by 4 percent, but were covered by rises in sales for its Fisher Price brand - which includes the Fisher-Price Core, Fisher-Price Friends and Power Wheels - and American Girl products, which increased by 6 and 16 percent, respectively. Sales of the American Girl brand were $102.0 million, primarily driven by strong sales of McKenna™, the 2012 Girl of the Year, and the expansion of retail locations.
The company, which sells its products at leading retails such as Wal-Mart (WMT), Target (TGT) and Toys R Us, announced a fourth quarter cash dividend of 31 cents per share of MAT common stock. The dividend will be payable on December 14, 2012, to stockholders of record on November 28, 2012.

During the third quarter of 2012, the company repurchased 139,000 shares of its common stock at a cost of approximately $5 million.
Shares of MAT closed Monday’s trading at $35.42 on 4.2 million in volume. Shares are up more than 30 percent in 2012. Rival toy maker Hasbro Inc. (HAS) reports its earnings next week. Hasbro has also had a strong year as can be seen in the chart below.

20121016-071627.jpg

(Click to Enlarge)

20121016-071654.jpg
(Click to Enlarge)

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer

Companies

Symbol Name Price Change % Volume
WMT Wal-Mart Stores Inc. 69.92 -0.42 -0.60 4,454,231
POWL Powell Industries Inc. 39.97 0.37 0.93 62,492
TGT Target Corporation 77.45 -0.39 -0.50 1,519,339
MAT Mattel Inc. 29.39 -0.29 -0.98 1,472,044
HAS Hasbro Inc. 85.76 -0.97 -1.12 303,567

Comments

Emerging Growth

IBC Advanced Alloys Corp.

IBC Advanced Alloys Corp is engaged in the production and development of specialty alloy products. Its products include copper alloys and berryllium aluminium alloys.

Private Markets

Pinterest

Pinterest is a visual discovery and planning tool. Users ("Pinners") use the site and apps to get ideas for their future, such as recipes, places to travel, and products to…

8tracks

Our mission is to be the best place for people who care about music to create and discover thoughtfully curated playlists. In essence, 8tracks is a platform for online mixtapes.