Mattel Seeing Drop in Domestic Sales

The news has been filled with reports of recalls of toys due to hazards to our children. These range from lead paint being used on the toys to defective parts. Toy producers are starting to feel the economic pinch due to this, and Mattel is no exception. Mattel saw their overall worldwide sales only increase by three percent in the third quarter of 2007. What might be more concerning for the company though is that their domestic sales actually dropped. Domestic gross sales in the United States were down 2 percent. Several popular brands saw considerable drops in sales. This information was released in a recent press release from Mattel, Inc.

In the third quarter of 2007 Mattel, Inc. had $310.5 million in operating income. This was after suffering the effects of $40 million in costs related to the recalls for Mattel, Inc. products. Overall Mattel, Inc. did see an increase in net sales worldwide by 3%, but that was carried by the international market for their products which saw a ten percent increase in gross sales. In the United States the two percent decrease in gross sales was largely effected by some of Mattel, Inc.'s best known brands struggling.

The Polly Pocket Brand products were down in sales significantly percent internationally. Meanwhile, one of the best known toys by Mattel, the Barbie brand, saw a decrease in sales of 4 percent. While some of the brands for girls struggled, Mattel's products for boys still had strong showings. The sales for their Wheels line saw a third quarter increase of nine percent. The Wheels brand is made up of products from Hot Wheels(R), Matchbox(R) and Tyco(R) RC brands. Out of those, the Hot Wheels(R) and Matchbox(R) lines saw the biggest increases in sales, both up over 10 percent.

Other strong sellers for Mattel, Inc. included their Radica line and the Games and Puzzles lines of products. Radica(R) is a new line of products from Mattel. The success of the Disney/Pixar product lines from the movie CARS(TM) had a strong role in helping the company avoid an even more lackluster sales period.