In the spring, the company saw earnings per share fall 71% below last year's results, and the 5% increase it recorded in sales was due entirely to currency fluctuations.
Besides its financial woes, Mattel has been beset by legal woes of its own making. It has been recognized as having one (two, actually) of the top five frivolous corporate lawsuits: It sued an artist for photographing a Barbie doll in positions that defamed her character (it's a doll, right?) and sued MCA recording artist Aqua for recording a song called "Barbie Girl." Needless to say, it lost both cases. In the first suit, it had to pay the artist $1.8 million in legal fees; for the second, it's hammered out a recording contract for the doll. Well, not exactly the doll, but a stable of acts from MCA, a unit of Vivendi
Bad financial results, bad press, down-on-its-luck stock. It's a value investor's feeding trough! The new Motley Fool Inside Value newsletter found all that dour news and more to like about Mattel when it chose the Magic 8 Ball maker in its inaugural issue.
Mattel has been trying to keep Barbie -- and its bottom line -- up with the times. Alyce Lomax noted that the nauseatingly pink-themed doll (um, my words, not Alyce's) has had an infusion of Marketing 101: movies, perfume, an adult-sized clothing line to be featured at Nordstrom
Yet Mattel is more than just Barbie. It also claims ownership of Fisher-Price, Hot Wheels, Matchbox, Tyco, and the American Girl brand. It also licenses Harry Potter, Batman, Nickelodeon, Blues Clues, and the Olsen twins, Mary-Kate and Ashley. With a new Harry Potter movie due out next year from Time Warner's
New management, repositioned products, and one-third of the "Hot Dozen" toys heading into the Christmas season should really give Barbie something to sing about.
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Fool contributor Rich Duprey dislikes Barbie almost as much as Barney. He owns shares of Mattel but not of any of the stocks mentioned in this article.