Mattel CEO: Continued Pressure From Retailer Inventory Cuts
18 July 2009 - 12:29AM
Dow Jones News
Mattel Inc. (MAT) expects second-half revenues to reflect
ongoing pressures tied to retailers' efforts to align inventories
with weak demand, company Chairman and Chief Executive Robert A.
Eckert said.
"It should come as no surprise that we anticipate the
continuation of pressures on the top line from several areas,"
including the negative effects of foreign-currency exchange, Eckert
said during a conference call. "Retailers are still very cautious
on their inventory positions, as are we."
In the U.S., where Mattel has the best point-of-sale data on how
products are selling at retail, the company estimates that retail
sales of its products are down by low-single-digit percentages
year-to-date. But shipments to retailers remain down in mid- to
high-single digits, Eckert said.
"As I visit stores, and not just looking in the toy aisles but
looking broadly at retail, there is just a lot less inventory
available," Eckert said.
Earlier Friday, Mattel reported an 82% jump in second-quarter
earnings as tight expense control offset worse-than-expected
sales.
The world's largest toy maker reported a profit of $21.5
million, or 6 cents a share, up from $11.8 million, or 3 cents a
share, a year earlier. Revenue fell 19% to $898.2 million, with
currency exchange accounting for five percentage points of the
decline.
Analysts polled by Thomson Reuters most recently were looking
for break-even results on revenue of $970 million.
-By Mary Ellen Lloyd, Dow Jones Newswires, 704-948-9145;
maryellen.lloyd@dowjones.com