Last week, Mattel
The entire 5% increase in sales was due to currency fluctuations. In addition, selling, general, and administrative (SG&A) costs as a percentage of sales increased from 29.9% to 32.2%. If we factor out the 5% currency fluctuation, SG&A/sales becomes 33.7%.
I'm sure you're thanking me for the math lesson, but what can we learn about business operations from this?
Well, SGA/sales rose 3.8%. But the extra SG&A spending created no new sales. Unfortunately, that's money down the drain. Perhaps there is a lag in converting spending into new sales, but we will have to wait and see.
In the conference call, Eckert mentioned that Bratz, distributed by Hasbro
In addition, Eckert also mentioned that the new Barbie products represented a smaller portion of what was available at stores. So, the likely scenario is that retailers saw Bratz selling and allocated more shelf space to Bratz, thereby squeezing out Mattel's opportunity to realize sales on its newer products. Every time my daughter and I go to the toy store, the shelves are lined with Bratz and she goes into a trance. My limited field research shows that Bratz indeed muscled the blondes off the shelves.
Yes, this is only one quarter of results. And Eckert is committed to "improving top line growth" and "will continue to invest in programs and initiatives" to do so. Stayed tuned to the sales growth and SG&A/sales figures to see if Mattel's eye for fashion improves.
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Fool contributor David Meier 's house has many Barbie dolls, but no Bratz. His portfolio contains none of the companies mentioned either.