By Matt Andrejczak
SAN FRANCISCO (Dow Jones) -- Mattel Inc. reported Monday that
fourth-quarter profit fell 46%, citing the ongoing economic slump,
and shares tumbled nearly 17% in premarket trading.
The El Segundo, Calif.-based toy maker reported quarterly net
income of $176.4 million, or 49 cents a share. In the year-ago
period, when its profit was hit by product recall charges, the toy
maker earned $328.5 million, or 89 cents a share.
Sales fell 11% to $1.94 billion. Foreign-currency translations
knocked 5 percentage points off sales, Mattel (MAT) reported.
"Our business wasn't immune from the deteriorating economic
environment of 2008," said Robert Eckert, Mattel's chairman and
chief executive officer. "In response, our focus for 2009 is on
cost and spending reductions, and maintaining a strong balance
sheet."
Worldwide gross sales for the Barbie brand declined 21% in the
quarter.
Analysts had expected Barbie to rebound.
The doll, which turns 50 this year, has had trouble dealing with
the pouty-lipped Bratz dolls and other forms of play for young
girls. Mattel late last year won a favorable ruling in its lawsuit
against the maker of Bratz, and retailers have been heavily
discounting the dolls.
Sales for the Wheels category, which includes the Hot Wheels,
Matchbox and Tyco R/C brands, fell 19%.
Fisher-Price sales declined 10% to $754.2 million.
While the toy industry has proved to be more resilient in
economic downturns, 2008 was tough on all consumer product makers.
Analysts are forecasting U.S. toy industry sales fell 5% to 6% last
year. A final figure is expected to be released at Toy Fair in
mid-February.
Mattel does not issue public profit targets. Rival Hasbro Inc.
(HAS) reports earnings Feb. 9.
There is concern about first-quarter sales for toy makers.
Retailers may order fewer toys because of current inventory levels.
This is in spite of cautious order patterns last fall.
Shares of Mattel closed Friday at $14.19. The stock is down 25%
over the past 12 months.
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