Retailers, consumers and prices
Check Out Line: Cost cuts in toy land
Check out the quarterly profit from Mattel.
The world’s top toymaker posted a higher-than-expected quarterly profit but it wasn’t driven by consumers clamoring for its toys.
Instead, it cut costs to make up for a dearth of toys based on summer movies and the impact of foreign exchange.
Profit for Mattel, the owner of Hot Wheels and Barbie, rose to $21.5 million, or 6 cents a share, in the second quarter from $11.8 million, or 3 cents a share, a year earlier.
But sales fell 19 percent to $898.2 million. The impact of currency exchange rates accounted for 5 percentage points of the decline.
Worldwide Barbie sales fell 15 percent, hurt mostly by lower overseas sales.
While both Mattel and rival Hasbro are battling lower demand in the recession, Hasbro is ahead in the movie-based segment this year with toys linked to summer films such as “Transformers – Revenge of the Fallen” and “G.I. Joe – The Rise of the Cobra.”
To offset slumping sales, Mattel has cut 1,000 jobs, shaved corporate travel expenses and taken steps to trim advertising and distribution costs in past months. In the past quarter, it cut roughly $91 million of costs in areas such as administration and advertising.
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