Mattel Inc. said on Monday that its third-quarter profit slumped 12 percent as lower Barbie sales eclipsed higher sales in much of the rest of its product portfolio.
The El Segundo-based toymaker reported net income of $225.3 million (55 cents per diluted share) for the third quarter ended Sept. 30, compared with $255.8 million (61 cents) a year earlier.
Net sales were essentially flat at $1.666 billion from $1.667 billion in the comparable year-earlier period, with the latest quarter benefiting from currency exchange rates. Mattel said U.S. sales fell 4 percent, while international sales rose 5 percent.
The results dipped below analysts' estimates of 61 cents per diluted share on revenues of $1.7 billion.
Third-quarter worldwide gross sales for the Mattel Brands business unit were $1 billion, a 5 percent decrease from the prior year's third quarter. Worldwide sales of Barbie fell 18 percent as it faced heavy competition from MGA Entertainment Inc.'s Bratz dolls.
Worldwide sales for the company's Other Girls Brands which includes Polly Pocket!, Little Mommy and Disney Cinderella rose by double-digits, Mattel said.
Sales for the Wheels category, which includes the Hot Wheels, Matchbox and Tyco brands, were up 4 percent, driven by higher sales of Hot Wheels. Sales for the Entertainment business, which includes Games and Puzzles, were down 7 percent for the quarter, fueled by declines in its Yu-Gi-Oh! and JuiceBox properties, while sales of the Batman products were higher.
Sales for the company's Fisher-Price brand edged up 6 percent to $727.4 million from the year-ago period. Sales for its American Girl business unit jumped12 percent to $69.1 million.
"Overall, we continue to experience the effect of a difficult retail environment as well as cost increases," said Robert A. Eckert, chairman and chief executive, in a statement. "I am confident, however, that our recent organizational changes have laid a positive foundation as we continue to reinvigorate the Barbie brand and improve our processes across the organization."
Last week, Mattel announced a plan to consolidate its Mattel and Fisher-Price brands into one division called "Brands.", which will include the Barbie, Hot Wheels and Fisher-Price brands, as well as licensed entertainment properties for Batman, Dora-the-Explorer and Sesame Street. Neil Friedman, the former president of the Fisher-Price Brands unit, will run the new division.
Shares of Mattel fell 4.5 percent to settle at $15.23 on Monday.
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