Mattel profit slumps as Barbie's appeal fades

(Reuters) - Mattel Inc , the world's largest toymaker, reported a weaker-than-expected 23 percent drop in profit as Barbie sales fell for the fourth straight quarter, highlighting the iconic brand's struggle to stay relevant.

Toy sales in mature markets such as the United States and Europe have been weak so far this year, but Mattel had previously fared better than its competitors helped by the growing popularity of its American Girl and Monster High dolls.

The company, which also makes Hot Wheels cars and Fisher-Price baby toys, said second-quarter net income fell to $73.3 million, or 21 cents per share, from $96.2 million, or 28 cents per share, a year earlier.

Analysts on average were expecting earnings of 32 cents per share, according to Thomson Reuters I/B/E/S.

Worldwide Barbie sales fell 12 percent. The company does not break out Barbie sales numbers as it is part of the Mattel Girls & Boys Brands unit. Sales at the unit rose 1 percent to $792.4 million during the quarter.

In contrast, sales of American Girl dolls, which the company sells through its own stores, catalog and websites, rose 14 percent to $78.2 million.

Sales of the company's Other Girls brands were up 23 percent, mainly driven by Monster High's dolls. These dolls depict "descendants" of horror story characters such as Dracula and Frankenstein.

Most of Mattel's brands sell through retailers like Wal-Mart Stores Inc , Target Corp and Toys R Us Inc , as well as through its own catalog and website.

The toy cars business, which includes the Hot Wheels and Matchbox brands, also struggled with sales falling 6 percent.

Sales of Fisher-Price toys fell 3 percent to $396.7 million.

Total sales rose 1 percent to $1.17 billion, missing analysts' average estimate of $1.22 billion.

Mattel said selling, general and administrative costs as a percentage of net sales rose by 320 basis points, including the impact of an asset impairment charge of 120 basis points.

The company also said it increased its share repurchase program by $500 million.

Smaller toy company Hasbro Inc is due to report its results on July 22.

Mattel shares were unchanged in pre-market trading after closing at $46.33 on Tuesday on the Nasdaq.

(Reporting by Dhanya Skariachan in New York & Chris Peters in Bangalore; Editing by Saumyadeb Chakrabarty)

Source: http://news.yahoo.com/mattel-second-quarter-profit-falls-barbie-struggles-101126176.html

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