Mattel Inc.'s (MAT) third-quarter earnings fell 3.5% amid a
continued lack of consumer spending, detrimental foreign-exchange
rates and a lack of entertainment-inspired toys.
Sales slid 8%, dragged particularly by worldwide sales for the
company's entertainment business, which fell 15%. That was mostly
because last year's results were boosted by toys related to movies
including "The Dark Knight" and "Kung Fu Panda."
"As expected, revenues continue to be challenging this year due
to the overall economic environment" said Chairman and Chief
Executive Robert Eckert. "That said, we are continuing to make
strong progress on reducing costs, rebuilding margins and
generating strong cash flow."
The world's largest toy maker has recently succeeded in cutting
costs, raising prices and controlling expenses during economic
turmoil, swinging to a profit in the second quarter even as sales
have slumped.
Mattel reported third-quarter earnings of $229.8 million, or 63
cents a share, down from $238.1 million, or 65 cents, a year
earlier. Revenue fell to $1.79 billion.
Analysts polled by Thomson Reuters had forecast earnings of 63
cents on $1.78 billion in revenue.
Gross margin rose to 51.3% from 46.2% amid the cost cuts.
The company said Barbie sales fell 8%, Fisher Price slid 4% and
American Girl fell 4%.
Mattel on Wednesday said it had agreed to settle a class-action
lawsuit related to a 2007 recall of millions of toys that contained
lead. The company didn't disclose the amount of the settlement, but
said it had previously recorded charges to reserve for the
litigation. Mattel said the final settlement won't be material to
the company's operating results.
Shares closed at $19.58 on Thursday and didn't trade premarket.
The stock is up 35% the past year.
-By Nathan Becker, Dow Jones Newswires; 212-416-2855;
nathan.becker@dowjones.com