Mattel Rises on Barbie Market Gains
(Bloomberg) -- Mattel Inc. jumped after its profitability grew last quarter and Barbie, its biggest brand, continued to gain market share.
- Mattel’s profit margin increased to 42.6 percent last quarter, compared with the average projection for 41.5 percent.
- Mattel, led by Chief Executive Officer Ynon Kreiz, improved profitability partly with $500 million in cost cuts, including layoffs, since Kreiz took the helm in April.
- For the four months through September, Mattel was the largest global toymaker in terms of sales at retailers, Mattel said Thursday, citing data from researcher NPD. It also boosted sales 3.7 percent in North America, despite the demise of Toys “R” Us in the U.S. and other markets.
- China proved to be a growing concern, with sales declining. The company overestimated demand for the region and is now cleaning up the excess inventory at retailers, Kreiz said in an interview. Overall, international revenue sank 18 percent.
- Mattel’s report comes on the heels of chief rival Hasbro Inc.’s disappointing quarter. Both are still feeling the effects of the Toys “R” Us Inc. liquidation, with Mattel saying the chain’s demise lowered gross sales by 3 percentage points.
- Mattel shares rose 8.4 percent to $15 in late trading in New York. They had declined 10 percent this year through Thursday’s close.
- For more details on the earnings, click here.