Toy maker Mattel, Inc. (MAT) reported Wednesday that its first-quarter profit surged nearly five times from last year, benefited by strong performance in its girls' brands, including Monster High and American Girl Brands, as well as improved margin. Quarterly top line beat market estimates. The company also announced dividend.
Mattel Chairman and Chief Executive Officer Bryan Stockton said, "Overall, 2013 is off to a solid start, demonstrating the strength of our global portfolio of brands, countries and customers. We are very pleased with the performance of our Girls portfolio and the strong results across all regions, particularly Europe. We continue to see the first quarter as our pre-season and we remain focused on a strong 2013 and delivering in the all-important holiday season."
In its recently concluded first quarter, net income surged to $38.5 million or $0.11 per share from last year's $7.8 million or $0.02 per share. On average, 13 analysts polled by Thomson Reuters expected earnings of $0.09 per share for the quarter. Analysts' estimates typically exclude one-time items.
Gross profit climbed 14 percent, and gross margin increased 320 basis points to 54.2 percent. Operating income was up 129 percent, and operating margin improved to 6.6 percent from 3.1 percent a year earlier.
Quarterly net sales grew 7 percent to $995.6 million from prior year's $928.4 million, and beat consensus estimates of $985.79 million.
On a regional basis, gross sales advanced 5 percent in the North American Region, comprising the U.S., Canada and American Girl, with no impact from changes in currency exchange rates.
International Region gross sales grew 9 percent, including a 2 percentage point unfavorable impact from changes in currency exchange rates.
In the quarter, sales for Mattel Girls & Boys Brands increased 11 percent, as Other Girls Brands' sales climbed 56 percent, driven by Monster High. Meanwhile, sales of Barbie brand, and Wheels category, which includes the Hot Wheels, Matchbox and Tyco R/C brands, were down. Sales for the Entertainment business were up 1 percent.
First-quarter gross sales for Fisher-Price Brands fell 7 percent, primarily due to Fisher-Price Core, partially offset by improvement in Fisher-Price Friends.
American Girl Brands' sales climbed 32 percent, driven primarily by increases in all core doll segments, led by Saige, 2013 Girl of the Year, and strong performance at retail, including the three new stores opened in 2012.
In addition, the company said its board declared a second-quarter cash dividend of $0.36 per share, reflecting an annualized dividend of $1.44 per share, representing a 16 percent increase to last year's total dividends. The dividend is payable on June 14 to stockholders of record on May 23.
Mattel shares closed Tuesday's trading at $42.98, up $0.04 or 0.09 percent. In the after hours trading, shares edged up 0.63 percent.
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