Q3-2015: International sales pull down Mattel revenue by 11%; Income down 33%

BENGALURU: US toymaker Mattel reported a 11 per cent decline in net sales in the quarter ended 30 September, 2015 (Q3-2015, current quarter) at $ 1792 million as compared to the $2021.40 million in the corresponding year ago quarter. Gross sales dropped 5 per cent in the North American region to $1184.8 million in Q3-2015 as compared to the $1243.5 million in Q3-2014. The drop in sales was further accentuated by a  19 per cent drop in revenue from international gross sales at $798.6 million in the current quarter as compared to the $989.2 million in the corresponding year ago quarter. The company’s net income after income tax declined 33 per cent to $223.8 million (12.5 per cent margin of net sales) in Q3-2015 as compared to the $331.8 (16.4 per cent margin of net sales) in the corresponding year ago quarter. The company’s cost of sales declined 9 percent to $912.4 million (50.9 per cent of net sales) in Q3-2015 as compared to $1000.30 million (49.5 per cent of net sales) in Q3-2014. “Our results for the quarter, excluding the significant impact from currency exchange rates, were broadly in line with our expectations at this stage of our turnaround,” said Mattel Chairman and CEO Christopher Sinclair. “Importantly, we’re very encouraged by the progress we are making on reenergizing the company, building momentum in our core brands, improving retail execution, reducing costs and building scale in key emerging markets. As we continue our turnaround efforts, we remain comfortable with our full-year outlook.”

Sales by brands

Girls and Boys brands The drop in gross sales across geographies was driven by a 15 per cent drop in ‘Girls and Boys’ brands in the current quarter to $1120.6 million as compared to the $1323.3 million in Q3-2014. Within the Girls and Boys brands, ‘Barbie’ gross sales saw a 14 percent decline in Q3-2015 to $302 million from $352.9 million in Q3-2014. In the current quarter, ‘Other Girls’ brands gross sales saw an even sharper decline in net sales of 29 per cent to $320.4 million as compared to the $451.4 million in Q2-2014. ‘Wheels’ gross sales saw a 6 per cent increase in Q3-2015 at $266.9 million as compared to the $252.2 million in Q3-2014, while ‘Entertainment’ gross sales declined  by 13 per cent to $231.3 million in Q3-2015 as compared to the $266.8 million in the corresponding year ago quarter. Fisher-Price brands Fisher-Price brands saw a 6 per cent decline in gross sales in Q3-2015 at $625.3 million as compared to the $663.4 million in Q3-2014. American Girls brands American Girls brands gross sales in Q3-2015 declined 3 per cent to $109.9 million from $113.1 million in Q3-2014. Construction and Arts & Crafts Brands Construction and Arts & Crafts Brands gross sales declined 4 per cent to $118.5 million in Q3-2015 from $123.4 million in Q3-2014. Dividend The Mattel board declared 2015 fourth quarter cash dividend of $0.38 per share, which is flat compared to the fourth quarter of 2014. Click here for the financial release