MATTEL, INC.

Mattel, Inc. Company Profile

Barbie is the platinum blonde in power at Mattel, the #1 toy maker in the world. Its products include Barbie and Polly Pocket dolls, Fisher-Price toys, Hot Wheels and Matchbox cars, American Girl dolls and books, and various Barney, Ferrari, and other licensed items. Mattel also sells action figures and toys based on Walt Disney and Warner Bros. movies. To satisfy techie kids, Mattel has accessorized Barbie with interactive games, software, and a line of MP3 players. The company has even licensed the Barbie name for eyewear. It also sells games (UNO) and puzzles. Mattel is trying to reduce its reliance on its biggest customers -- Wal-Mart, Toys "R" Us, and Target -- through its own catalog and Internet sales.

Operations

Prior to fiscal 2013 Mattel operated its business through geographic segments: domestic and international. It now uses North America, International, and American Girl.

The North American segment (45% of sales) markets and sells toys in the US and Canada, as its name suggests, through the Mattel Girls & Boys Brands and Fisher-Price Brands categories. In the Mattel Girls & Boys Brands category, Barbie includes brands such as Barbie fashion dolls and accessories, with the Polly Pocket, Little Mommy, Disney Classics, and Monster High lumped into the Other Girls Brands. Wheels include Hot Wheels, Matchbox, and Tyco R/C vehicles and play sets. Entertainment includes CARS, Radica, Toy Story, Max Steel, WWE Wrestling, Batman, and Superman, as well as games and puzzles. The Fisher-Price Brands category includes Fisher-Price, Little People, BabyGear, Imaginext, Dora the Explorer, Bubble Guppies, Thomas & Friends, Mike The Knight, Octonauts, Mickey Mouse Clubhouse, Disney’s Jake and the Never Land Pirates, and Power Wheels.

Products marketed by the International segment are generally the same as those developed and marketed by the North America segment, although some are developed or adapted for particular international markets. Mattel’s products are sold directly to retailers and wholesalers in most European, Latin American, and Asian countries, and in Australia and New Zealand, and through agents and distributors in those countries where Mattel has no direct presence. Mattel’s International segment revenue represented 46% of worldwide sales in 2012.

The American Girl segment is a direct marketer, children’s publisher, and retailer known for its flagship line of historical dolls, books, and accessories, as well as the My American Girl and Bitty Baby brands. American Girl also publishes best-selling Advice & Activity books and the award-winning American Girl magazine. American Girl products are sold primarily in the US.

Geographic Reach

El Segundo, California-based Mattel fills toy chests worldwide. The toymaker sells products in more than 150 nations, across North America, Europe, Latin America, and Asia Pacific. North America accounted for about 45% of revenue in fiscal 2013. Europe is the company's largest international market, generating some 25% of Mattel's total sales.

Sales and Marketing

Mattel capitalizes on major events, such as movie releases, by focusing on product tie-ins. In total, in 2013 the toymaker spent nearly $750 million (about 12% of net sales) on ads and promotion, up from $718 million in 2012. Mattel also promotes its toys and characters through online and broadcast media.

Mattel sells its products through its own retailers and wholesalers in most of the world and through agents and distributors in those countries where itl has no direct presence. American Girl products are sold directly to consumers. Mattel supports its product lines with extensive advertising and consumer promotions. Advertising takes place at varying levels throughout the year and peaks during the traditional holiday season. Advertising includes television and radio commercials, magazine, newspaper, and internet advertisements, and social media. Promotions include in-store displays, sweepstakes, merchandising materials, and major events focusing on products and tie-ins with various consumer products companies.

Wal-Mart Stores ($1.2 billion), Toys "R" Us ($700 million), and Target ($500 million) are the company's three largest customers, altogether accounting for 36% of its worldwide sales. That total is beginning to decline as Mattel works to reduce its reliance on big retailers by selling more products directly.

Financial Performance

The world's largest toy maker has seen its sales and profits rise steadily in recent years. Mattel’s revenue increased 1% to $6.5 billion, up from $6.42 billion, a modest gain the company said was caused by weak US demand. While Barbie, Hot Wheels, and most of the Fisher-Price products were down, Monster High and Ever After High in the Other Girls category, along with American Girl Brands, were the bright spots. Most international sales were down but Other Girls' Monster High did well there, too.

Net income rose 16% to $904 million due mainly to a litigation charge that appeared on the books in 2012 but was absent in 2013. Cash from operations got cut in half due to excess inventory, asset impairment charges, and lower accounts receivable.

Strategy

In 2014 Mattel looks to capitalize on Ever After High's global growth opportunities, innovate for growth in its key brands (Barbie, American Girl, and Hot Wheels), expand its girls portfolio, invest in international markets, and improve efficiencies in its online and bricks and mortar retail efforts.

The company carried out the girls and international parts of its strategy in 2014 when it partnered with high-end Mexican retailer El Palacio de Hierro to offer American Girl merchandise in its stores.

Mergers and Acquisitions

With an eye on taking on LEGO, Mattel acquired Canada's MEGA Brands, the maker of Mega Bloks construction blocks, in April 2014. Mattel paid $460 million in cash to acquire the company, LEGO's biggest competitor.

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MATTEL, INC.


333 Continental Blvd
El Segundo, CA 90245-5032
Phone: 1 (310) 252-2000
Fax: 1 (310) 2522179
www.mattel.com

STATS


  • Employer Type: Public
  • Stock Symbol: MAT
  • Stock Exchange: NASDAQ
  • Chairman and CEO: Bryan Stockton
  • EVP Global Operations: Peter Gibbons
  • Chairman and CEO: Bryan Stockton

Major Office Locations

  • El Segundo, CA

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