Saturday, April 19, 2014

Barbie is dying!

I found this Huffington Post story:
* First-qtr net loss $0.03/share vs $0.11 profit year earlier

* First-qtr adjusted profit $0.01/share vs est. $0.09

* Sales fall 5 pct to $946.2 mln vs est. $952.9 mln

* Shares fall as much as 3 pct (Adds details, analysts comments; updates shares)

April 17 (Reuters) - Mattel Inc, the world's largest toymaker, reported its first quarterly net loss in nearly five years due to a double-digit fall in sales of its iconic Barbie dolls, sending the company's shares down as much as 3 percent in early trading.

Mattel's worldwide sales fell 5 percent to $946.2 million in the quarter ended March 31 due to lower demand for its key toy brands.

Sales of Barbie dolls fell 14 percent, while those of Fisher-Price line aimed at infants and preschoolers declined 6 percent.

Mattel has looked to newer products to boost sales as children increasingly opt for electronic games and other gaming activities over traditional toys that are decades old.

Barbie made her debut in 1959, distinguishing herself in the mass market for dolls with her fashion model-like figure.

"(Barbie is) still a $1.2 billion business. It is still very meaningful for Mattel and it is very hard to grow a $1 billion business," Morningstar analyst Jaime Katz told Reuters.
I don't know yet if Barbie is dying. I have a niece in sixth grade, and she was never into playing with Barbie--she wanted to play with My Little Pony, Littlest Pet Shop, and Leggos--Harry Potter Leggos first, and now Star Wars.  Competition in the toy market is intense,  with a range of themed toys competing for children's interests.  Even the toy doll market is competitive, with the wholesome Barbie going up against the semi-slutty Bratz Dolls, and the gothic Monster High Dolls--which are owned by Mattel!  It appears to me that there are more toy choices out there for girls than just Barbie. 

The Huffington Post story does give this interesting detail:
Mattel's gross sales declined 10 percent in the all-important holiday quarter as shoppers spent less on discretionary items such as toys, especially the action figures and preschool toys that represent the largest categories for Mattel and rival Hasbro Inc.
So the parents of children have a choice in spending their stagnating wages on either food or toys, which are they going to spend their money on?

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