Mattel Loses $47 MM: First Quarter 2008

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Until major competitor, Hasbro – whose sales were up 14% in Q1, 2008 – Mattel posted a loss of $46.6 million … before you go blaming it on shortage of CARS, the problem is the Fisher Price division … sales in that division were down 13% percent

“Fisher-Price, Mattel’s education and preschool toy company, accounted for the brunt of the disappointment, with sales slipping 13% from the prior year to $341.3 million. The Fisher-Price Friends unit, which includes items like Elmo, Dora the Explorer and Sesame Street, reported a 49% decline as this year’s toys failed to attract as much attention as they did a year ago.

John Taylor, an analyst at Portland-based Arcadia Investment Corp., linked the drop to the current lack of an exciting Elmo toy and softening demand for Dora. “The magnitude was bigger-than-expected,” he said, but he added that Elmo Live, a new dancing toy to be introduced later this year, “has a chance to be another high point.”

Via the WSJ

We noted that costs were going up in this post but perhaps there’s another increase coming …

“Mattel added that it expects manufacturing costs to continue to rise in China as the yuan continues to gain on the dollar and as inflation in China nears the highest level in more than a decade. The toymaker said it may raise prices this year in the “mid-to-high single-digit range” to combat these forces.”

There was no specific mention of the Disney Pixar CARS …

The official press release on the earnings report is here.

An audio podcast of the conference call will be available tomorrow here.

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18 Comments

Filed under CARS, Disney Pixar, Marketing, Media, Retail, Toys

18 responses to “Mattel Loses $47 MM: First Quarter 2008

  1. jackdaddy2008

    “before you go blaming it on shortage of CARS, the problem is the Fisher Price division … sales in that division were down 13% percent”

    Yeah……………..

    Sure………..

    If you had met demand, the extra sales from your Disney car segment would have wiped out most if not all the 13% lost by Fisher Price.

    If Cars IS the new Star Wars, then Mattel should be enjoying record profits?!

    I haven’t heard of any consumers queuing up outside stores for the latest Fisher Price push and pull squeaky dog?

    People do that for Cars though!

    WHY?

    BECAUSE THERE IS NOT ENOUGH OF THEM!

    It is no wonder consumers are losing faith in them as a company, especially in light of the incredibly inexplicable decision regarding the sale of the Motor Speedway of the South.

    HAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHA

  2. jackdaddy2008

    The toymaker said it may raise prices this year in the “mid-to-high single-digit range” to combat these forces.”

    THAT’LL GET US BUYING MORE!!!!!!!!!!!!!!

  3. jackdaddy2008

    Notice no mention of Cars!

    They have messed up this up big time, they should be screaming from the roof tops about cars, but they seem to treat the whole area like an inconvenience.

    Manufacturing costs?

    Combating these forces?

    Mattel suck.

  4. Steve, AKA: Poppa

    The lack of product, i.e. Cars, is not entirely the fault of Mattel. Once upon a time retailers were visited by toy representatives, who watched out for the shelf space alloted to the manufacturer. As long as the retailers allows HAL (2001, Space Odyssey), the computer control delivery of inventory, the buyer is stuck. Some of my local retailers have peg warmers populating the toy aisle. HAL will not send more inventory because HAL says there’s enough on hand. Of course nobody wants 25 Toy Story Movie Moments, so we are stuck. The other factors include the total lack of expertise in the retail store as far as marketing. What do you expect from a ‘manager’ who does not know one toy line from another? Mattel cannot be caught holding the bag on excess inventory. If retailers do not order, then Mattel has to eat it. Remember, collectors are always a very small part of the total retail sales picture. Also keep in mind the collector may be after every casting that has been made, but, the kids may be interested in only the major characters. This is the way it is with all product lines. If there were solid cases of one new casting, that casting will quickly become a peg warmer too. Disney also has the responsibility to make sure their licensee is performing adequately. So far, I’ve been able to locate every casting I’ve wanted for myself and a friend. And, the kids actually bust open the blisters and play with them! Egads! Toys for kids?

  5. Noel

    Not one of these people at marketing have a clue what the hot cars are. They keep shipping the old garbage with one or two new ones in the latest cases.

    Stores won’t order more until the peg warmers are gone. I have been finding some of the new ones lately like Not Chuck, Tow, Charlie Checker, Lightning Ramone, etc…

  6. jackdaddy2008

    Yeah but……………

    If you know about this HAL problem, and the retailer knows, and now we know, why don’t MATTEL know?

    And if they do, why haven’t they done something?

    I can’t believe that there hasn’t been one Manager of say, TOYSRUS, for example that hasn’t complained to either their directors or Mattel about not having what people want.

    Surely MATTEL have seen ebay?

    Maybe, there is a financial agreement involving ebay? They probably make more in listing fees than retailers do in sales/profit margins? And no stock holding or delivery process.

    The bulk of collectors sales happens on ebay, apart from big collectors who buy direct.

    Look at Anime Chuki.

    They know she is coming out, and they know they have too many Lightning Mcqueens, Ramones etc.

    Why do they send her in a case with Cars that don’t sell if they know the retailer wont play ball?

    They could easily, very, very, very easily change their shipping practices, so that new cars were shipped separately.

    A case of Anime Chuki would sell, and if they stuck to consistent releases like this, say two a month, consumers confidence would return and more collectors would be born.

    Imagine it – January Van and Chuki, February – Tumbleweed and Whoever. That would work.

    They should melt down the ones they have overstock of and start again, because I know that I will not be collecting the Cars 2 diecast range. Jack will get them to play with, but this is taking up too much of our lives.

    A complete mint carded collection will not get that much money in 10 – 15 years time, which is when we are selling ours towards Jacks University. The sheer time and effort is just not worth it. I put up with it through the Supercharged nightmare, but it keeps happening, and its not breeding exciting or hype, just dread.

    I simply don’t accept that enough is being done.

    This is Mattels fault.

    They make the Cars, and design the buying process.

    All the electronic purchasing systems in the world cannot help that.

  7. Monica

    I think Fisher Price sales are down because of the recalls! Although the media noise has died down about it, consumer confidence is still down overall and parents of the littlest ones (i.e. the Fisher Price customers) will be most conservative. Not that parents of older kids care less, it’s just that the 3+ set doesn’t stick stuff in their mouths as much.

    I also agree that Mattel could do a better job with how they release the CARS line.

  8. jackdaddy2008

    I hadn’t considered the recall affecting fisher price sales.

    Thats a good point.

    The fact the remains (as you have agreed) that if they had distributed better, their cars line would have put them in positive, not negative.

  9. Brett W

    A few more cars on the pegs make up for the 13% loss for another division?
    It would take millions and millions of CARS to make up for a $47million loss.

    Still sucks to see those empty pegs though..

  10. jackdaddy2008

    They would only have had to sell 8 million 1.55 diecast cars.

    Thats just individual carded cars.

    No movie moments or play sets.

    60 million people live in the uk, god knows how many in the rest of Europe?

    How many people live in America?

    Why are people sticking up for Mattel, they have ripped us off and let us down consistently and continue to do so?

    Its their fault that this product is becoming so shambolic.

    Facts –

    They don’t make enough cars.
    They make too many of certain types.
    They don’t stick to release dates and release what they promise.
    75% of my purchases happen on ebay!

    8 million units is nothing worldwide.

    Cars sell everywhere, not as big as in the States, but still strongly.

    My friend works in a supermarket and she says that as soon as newer cars go out on the shelf they are gone in days, and don’t come back in for weeks.

    That is a shortage.

  11. Steve, AKA: Poppa

    I’ve talked many times to a long time store manager for Toys R Us. He assures me that he has expressed to the head office in New Jersey frustration over a lack of inventory to meet customer demands. If a truck comes in and quickly sells out everyone is happy. The manager has met sales goals. He has no control over inventory. Probably the only way for the consumer to be heard is to become a shareholder and attend the annual stockholders’ meeting and make a ruckus. I personally would never own a share of Toys R us because of their marketing weakness. Toys R Us stores are the last to stock the latest toys and their prices are usually 20% more than Target, Wal*Mart and Fred Meyers. Keeping a product line “fresh” is the job of Mattel. I agree there should be a greater number of newer castings in the shipments or at least offer retailers the ability to order from a wider assortment of cases, i.e, older popular castings and newer castings. The collector has to remember the little tykes introduced to Cars will still want the main characters. A little kid is not going to want the complete raceway set of 40+ race cars. Mattel has to drag this out until the next movie.

  12. Steve, AKA: Poppa

    Hey, jackdaddy2008, patience is necessary unless you live in the sticks. EBay is a ripoff. I live in Tacoma, WA and I’ve been able to buy every last casting at retail. I’ve never paid more than $3.99 for any Car. Sometimes it has taken awhile because the toy scalpers and stock clerks clean out the early shipments. If I wanted I would have been able to buy every packaging variation also, which I do not do. As an example, for the longest time the Gold Mia and Tia were impossible to find. Then stacks of these appeared at K-Mart and Target. The same with most of the Movie Moments. I also buy on behalf of some youngsters that cannot make it to the store without mom or dad.

  13. jackdaddy2008

    I agree with most of what you are saying, but not your comment –

    “A little kid is not going to want the complete raceway set of 40+ race cars.”

    My son Jack is 4 and a half.

    I showed him the photo of the speedway set and told him how bad people at the toy factory might not let him have it.

    He wants it, not to open and play with, but for his 3 meter deep window box (jack has loads of ornaments, models and less playable toys on his window ledge – Mountain springs sits there).

    He said somehting like –

    “oh wooooooooow! That is the speshalist car ever! i want dat dad………….. can i get that for my window?”

  14. jackdaddy2008

    Furthermore…………………

    I had a very interesting day today!

    I went Cars shopping researching.

    I live in Edinburgh which is a big city by Britains standards.

    I left the house at 6am, as I wanted to go to Asda (walmart) along the road for breakfast and a look at what night shift had stocked up before my 8am meeting.

    Asda (walmart) had loads of WOC cars, and even had a supercharged Dale Earndhart. Fred, Mario, RPM and co. were all on the shelves, but no Anime Chuki or lightning ramone. The movie moments were rubbish, and yellow ramone is clearly breeding! There were 16 yellow ramones. They didn’t have anything I needed, and nothing worth ebaying.

    I then travelled all the way (literally) across the city to where my meeting was. Beautifully, three big stockists are located in a 500 yard radius of my meeting, so just before and just after my meeting, I hit TOYSRUS, The big W (Target) and the other Asda (Walmart).

    Asda was brilliant. They didn’t have much in the way of diecast, in fact it was more disappointing than the previous one. But, they had loads of rare Cars merch like quilt covers and lamps and thing, and they had swim wear/beach toys reduced. I didn’t buy any cars, but I did get some stuff from their sale. I got a £2 ($4) box of play doh for Jack and most surprisingly, I got a big Hot wheels Monster Jam ‘grave digger’ for only £3($6)!!!!!!!!!!! These retail everywhere else for £10 – £15 ($20 – $30), so I was very happy! They got loads of them! They also has a Bat mobile for £4, but I thought – Jack has enough, its another range, no! Still well worth the visit for £5!

    Next was big W (Target). They had the most car merchandise, but again, nothing exciting.
    They had about 30 freds (no pate variants!), which got me thinking they must be able to release more Chukis and ones like those the same way?!
    They had all the rip racers, which are quite rare.
    I didn’t get anything Cars related, they didn’t have what I need. I did get a big easter egg in a giant coffee mug with loads of mini egg for £1($2) though!

    Toysrus was interesting. They had the most choice and have all the minis you can get, but their diecast sucks!

    32 Yellow Ramones!
    16 Dinoco Mcqueen!
    17 BUZZ AND WOODY!

    They had 15 piston 500 racks (WOC) and loads of exclusives (not the new ones) but nothing I needed, it was disappointing. However……..

    I spoke to the general manager.

    Apparently they have 16 cases of new cars thay are all on a pallet sealed! The rep has to give them clearance to open it. Bascially they won’t until the other cars have sold! I half considered buying all their peg warming stock to flog at a loss on ebay just to get access to all their cases, but obviously did not! It occured to me that he was talking crap, and that most probably, the staff open all the cases and take the good ones.

    Very disappointing.

    Next was Sainsburys Meadowbank.
    This was my best visit.
    They only had 14 diecast vehicles, but had, red mia & tia, Rusty and dusty rust-eze and Mr & Mrs King.

    I left the mia tias and rusts for someone else as we have them opened and sealed, but bought Mrs King for Jack to play with, he doesn’t have her. This was a peak!

    Then I had my lunch meeting.

    After lunch, I hit John Lewis, Disney Store and Jenners. All were pathetically stocked, and again Yellow Ramone and Dinoco Mcqueen were common. The disney store only had 3 minis!

    I also went Woolworths (smaller big w/target), and they only had the usual suspects, but had half price turtle alien hunters, so I got Jack 2 aliens for his Turtle van.

    I finished at the other Sainsburys, and while they had loads, again they had nothing nice.

    Then I came home and was violently sick.

    Tomorrow I am going to the other 3 big retailers for cars in my quest to find Chuki.

    Toysrus said sales had slowed massively since Easter week.

    I wonder why?!

  15. jackdaddy2008

    RE – ebay is a rip off!

    If you buy one car at a time, yes definitely.

    However, if you know what you are doing and take your time………….

    Here are a couple of my recent purchases on ebay for cars to give you an idea –

    Purchase 1 –
    $120 (including insured shipping)
    Supercharged Lizzie, Doc, Ferrari, boost, purple ramone, snot rod. Piston cup 3 pack, WOC Pit crew fillmore, Pitrow racers Mcqueen, Chick & leak less.

    Purchase 2 –
    $55 (including insured shipping)
    Cars Loose Collection of 24 Mint with Race Case
    Wingo, Snot Rod, DJ, Boost, Nitroade, Chick Hicks, Leakless, Mater, Sally, Lightning McQueen, Purple Ramone, Fab & Reg Doc Hudson, Sheriff, Flo, Sarge, Filmore, Tex Dinoco, King, Hamm, Luigi, Pit Crew Guido, Tractor & Lizzie.

    purchase 3 –
    $140 (including insured shipping)
    Supercharged Nitroade, pit row nitroade & octane gain, toysrus exclusive guido/ferrari fan, pit crew guido, tractor tippin set, dinoco mia & tia, supercharged chick, gold mia & tia 3 pack.

    purchase 4 –
    $220 (including insured shipping)
    1 x original first wave fols v8 cafe
    1 x original first wave maters curio shop.

    purchase 5 –
    $200 (including insured shipping)
    All 12 original first wave release cars.

    We simply cannot get any of the cars listed above over here, except for the supercharged ones and some of the pit row racers. Our pit row racers are £7.99 on the shelf ($16).

    In total, if you add everything listed above together, I have spent $735 dollars on extra rare items.

    63 diecast vehicles, 2 discontinued play sets and a race case to be precise.

    Without the playsets, thats $515 (£258) and $8.18 (£4.09) a car including insured shipping.

    Our cars retail for £2.99 standard ($6).

    The ammount I have paid is probably cheaper than I could get them at retail in the Uk for when you take shipping off.

    I am also saving myself the hassle of finding them. I am also way ahead of most British collectors.

    In my opinion, ebay is anything but a rip off. I believe its the best thing since sliced bread.

    Lets hope I get a speedway at a good price too!

  16. Steve, AKA: Poppa

    OK, jackdaddy2008; Everything you quoted had been available in the USA for much less. If you’re forking out $6.00 US for a basic car, maybe eBay is OK for you. The cost of petrol you used on these forays appears to be costly. The basic car in the USA at my local Wal*Mart is $2.97; Target $2.99; Fred Meyer $3.59. My viewpoint of eBay holds for the USA. Maybe the devalued $ as compared with the Euro or pound should get me into the export business. I know a lot of vacationers from Europe find our prices cheap as compared to Europe. The local toy scalpers return their unsold inventory to all of the above mentioned stores, as the receipts for returns are usually good for 90 days. After 90 days everything essentially has become a peg warmer or is readily available. Last weekend I picked up Chuki and Lightning Ramone for $2.99 each mid day at Target. Contrary to alot of the bloggers here, all the other basic cars in that assortment were sold out within three days. What appeared to be at least three cases on Saturday afternoon was down to maybe four total cars by Tuesday, an indication kids are still buying. Most moms in the toy aisle let their kids get one or two cars at a time, so the demand is constant. That tractor tipping game was already tossed in the toy liquidation bins last year. Well, happy hunting.

  17. jackdaddy2008

    I know.

    I have spent some time in the states and for retail tourism your electronic goods and toys are the best. Your clothing (apart from exclusive sports goods) is not as good as over here though, your food is about the same, sometimes more expensive (except in restaurants & “take out”!) and your Precious metals and jewels are more expensive. God save the queen. You have to pay as much as us in taxes on average and for your health care, which we don’t. Our welfare/benefit system is officially the strongest, most effective and generous in the world. Our VAT system, property market, leisure industry and retail pricing systems have ensured that.

    A lot of my purchases such as Tractor Tippin were bought to improve our collection, i.e. – a bashed box needed replaced, supercharged blisters were slightly damaged and Jack has lost/broke/wants to play with a car we already have sealed etc.

    You cannot get the first wave cars, curio shop or flos v8 cafe in any shop worldwide! Maybe some obscure and remote store possibly has one or two, but it is doubtful, and would cost loads in phone calls, time and travel finding out. Ebay is always in your house! The race case was a mail order exclusive, and the only ones on sale in Britain are on ebay, for £15 ($30).

    We have not had any of the 3 packs, pit crew guidos, or dinoco mia & tias, released over here.

    As an unofficial rule, we are 4 – 12 weeks behind you release dates.

    Apparently Chuki & Lightning Ramone have been released, but I haven’t heard of or seen where yet. I am just going out in an hour to have a final proper look like yesterday. Toysrus probably have loads of them in the cases sealed away willy wonka style that the store manager spoke of yesterday. Time will tell. If they are waiting for all those yellow ramones and dinoco mcqueens to sell, Chuki should just about be out of her box for Christmas.

    Our standard price is £3 ($6) for a car, £5.99 ($12) for a movie moment and bizarrely £7.99 ($16) for a pit row launcher? We don’t have as many retailers or as much choice as you guys. Also there isn’t a stock up policy like yours in any of the stores. TOYSRUS just put the cars on the shelves whenever they feel like it, they don’t do it every Thursday at 10am as seems to more or less be the norm in America.

    When the first lot of newer supercharged Cars, like Mario, Dale, Bob, Fred, rpm etc. came along, the only reason I got them off the shop shelf was because I was consulting for a store for a few months, was there at 7am every day and got on well with the night manager. For the while I was there, he would tell me when fresh stocks of Cars came in and I would buy them the second they came out the box. 4 members of staff also did the same! Brilliantly, they were half price too! They were all gone by lunchtime the next day, except for the usual rubbish (ramone, hudson, dinoco mcqueen, etc.). They haven’t had Chuki or Lightning Ramone yet either.

    Our ebay culture is vicious in the uk. In general, most Brits are not as honest and decent as Americans, with the non sending of ebay items sold without recorded delivery (insurance ) a particularly popular British ebay past time. This selfish attitude carries over into Cars listings. Most people have realised that Cars sell for double on ebay if they are little different or rare. Any shop floor worker who works in or near a toy section that stocks Cars notices the patterns, and obviously staff talk to friends and family, so Cars get bought before Joe public has a chance to buy them and listed on ebay with a cool 100% mark up, sometimes more. Anime Chuki is selling on ebay uk for £10 ($20) today, thats a little over 3 times her floor value before postage. We have a bit of a false economy regarding Disney Cars over here in that you simply cannot get them at the price Mattel intends them to be sold at, until 3 – 6 months after they have been released!

    Sainsburys do fantastic half price sales 4 times a year, and you do get good cars from there during these sales. Their next one is in July, then October/November, January and Easter. In my opinion they are the only retailer in the uk who have actually more or less got their stocking policy of Cars right.

    I am not sure why you have commented on petrol prices and my forays?

    Surely this justifies what I am telling everyone?

    I basically went to all but 3 or 4 of the major retailers in our city yesterday, (which coincided with my business, so I didn’t really go out of my way) and I found what?

    1 Car we needed and 6 or 7 that could have been listed on ebay!

    I must have looked at over 1000!

    When you live with these circumstances, ebay is the only place to go, but I have to make it worthwhile due to shipping unless it is just the one, I buy some from the uk, like the first wave 12 backed Mater that had a spelling mistake in its title – £2.50 ($5)!

    Orders under $100 aren’t really worth it.

    On some occasions, it has worked out cheaper buying cars with insured insurance from the states than it has buying them on ebay here!

    I was going to use childrens toy closet, but they didn’t have enough of what I need. They had some stuff, but not enough to make my shipping worthwhile. That is not a dig by the way.

    You WOULD be worth your while going in to the export business. I have only found 6 or 7 sellers to be genuinely helpful with my needs at a reasonable price. British buyers need shipping insurance (priority mail with track and trace) as a standard product though!

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