Barbie sales slip by a third in US
Shares in toy giant Mattel plummeted to their lowest level in almost five years yesterday after the toymaker admitted sales of its iconic Barbie doll had fallen by a third in America.
Mattel blamed intense price competition as well as rising oil prices, which affect shipping costs as well as the cost of the plastics needed to make toys, for a 12 per cent fall in third quarter profits.
Mattel chief executive Robert Eckert described the company’s third quarter performance as “disappointing” and warned it would have to raise prices next year.
“Our prices have not kept pace with our cost increases,” said Eckert. “We are planning on making price increases in 2006 to recover some of the costs we’ve experienced.”
Shares drifted as low as $14.80 (£7.30) after the manufacturer reported third quarter earnings of $225.3m (£128.5m), down from $255.8m a year ago.
Falling Barbie sales wiped out increases elsewhere as little girls opted to play with the edgier looking Bratz dolls made by MGA Entertainment.
Worldwide sales for the Barbie brand fell 18 per cent in the third quarter. Group sales for the quarter were flat at $1.67bn.
Mattel’s nearest rival Hasbro fared better as Star Wars merchandise helped push net earnings up 4 per cent to $92.1m. Hasbro’s quarterly sales climbed from $947.3m to $988.1m.
Separately, media group Entertainment Rights has struck a deal with Mattel to distribute the next three Barbie movies in Britain.