Mattel, Inc. Shares Fall 10% on Plunging Q2 Earnings

Mattel's Q2 sales fell 9% year-over-year, eviscerating bottom-line profits in the process. Management is scrambling for better results in the vital holiday season.

Jul 17, 2014 at 10:30AM
Barbie Fool Flickr

Barbie sales fell 15%.

Shares of toy maker Mattel (NASDAQ:MAT) plunged more than 10% in pre-market trading, following the release of disappointing second-quarter results.

Net sales of $1.06 billion represented a 9% year-over-year decline. Earnings fell to $0.08 per share, compared to $0.21 per share in the year-ago period. GAAP earnings include a $0.11 tax benefit and a $0.06 MEGA Brands acquisition charge per share. Back these items out and the adjusted figure drops to $0.03 per share.

Analysts were looking for earnings of $0.18 per share on about $1.2 billion in sales. Mattel fell far short of these estimates.

Sales in the Barbie brand category fell 15% year-over-year. Fischer-Price's sales fell 17% and car toys under brands like Matchbox and Hot Wheels fell 3%. The new construction and arts & crafts segment, which was created by April's $423 million MEGA acquisition and includes brands like MEGA Bloks and RoseArt, reported sales of $61.6 million.

A bright spot amid the plunging sales, American Girl brands saw sales rise 6% to $83.1 million.

In a prepared statement, Mattel CEO Bryan Stockton expressed disappointment with second-quarter results, and explained what Mattel is doing to reach a stronger position for the all-important holiday season. "We completed the acquisition of MEGA Brands, reduced inventories, strengthened our management team, shifted marketing spend to the back half of the year, and exercised strong controls on SG&A expenses," Stockton said. "We need to drive [point of sale results] higher by bringing innovative products to market, making additional advertising investments and optimizing the effectiveness of our marketing spend."

Leaked: Apple's next smart device (warning, it may shock you)
Apple recently recruited a secret-development "dream team" to guarantee its newest smart device was kept hidden from the public for as long as possible. And there's one small company making Apple's gadget possible. And its stock price has nearly unlimited room to run for early in-the-know investors. To be one of them, and see Apple's newest smart gizmo, just click here!

Anders Bylund has no position in any stocks mentioned. The Motley Fool recommends Apple and Mattel. The Motley Fool owns shares of Apple. Try any of our Foolish newsletter services free for 30 days.

We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

Click here to learn about this incredible technology before Buffett stops being scared and starts buying!

David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

©1995-2014 The Motley Fool. All rights reserved. | Privacy/Legal Information