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.

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Companies

Symbol Name Price Change % Volume
WMT Wal-Mart Stores Inc. 71.45 2.08 3.00 22,412,893
POWL Powell Industries Inc. 34.47 0.35 1.03 60,509
TGT Target Corporation 66.21 0.42 0.64 4,838,643
MAT Mattel Inc. 25.79 -0.31 -1.19 4,651,977
HAS Hasbro Inc. 98.88 0.38 0.39 1,563,634

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