Oct. 16 (Bloomberg) -- Mattel Inc., the world’s largest toymaker, posted third-quarter earnings that topped analysts’ estimates as sales of Barbie and American Girl gained.
Net income in the three months ended Sept. 30 rose 16 percent to $422.8 million, or $1.21 a share, from $365.9 million, or $1.04, the El Segundo, California-based company said today in a statement. Analysts expected $1.12 a share, according to eight estimates compiled by Bloomberg. Third-quarter earnings included a tax benefit of 5 cents a share, Mattel said.
Chief Executive Officer Bryan Stockton has been trying to boost sales amid lackluster growth in the U.S. toy industry, the company’s largest market, as kids spend more time using electronic devices. Many toymakers, including Mattel, have tried making products that incorporate devices such as Apple Inc.’s iPad with little success.
“We’re pleased with our progress,” Stockton said on a conference call with analysts. “We are well positioned to execute well in the fourth quarter,” because Mattel has more shelf space at global retailers for the holidays than a year ago, he said.
Mattel gained 1 percent to $41.97 at the close in New York. The shares have increased 15 percent this year, compared with a 21 percent advance for the Standard & Poor’s 500 Index.
Stockton also has invested in Mattel’s technology infrastructure and top brands such as American Girl as a way to increase sales.
That paid off last quarter as sales rose 6 percent to $2.21 billion from $2.08 billion a year ago. Analysts estimated $2.18 billion. Dolls drove that growth as revenue from Barbie, its largest brand, rose 3 percent, and American Girl surged 20 percent. Sales from other girls lines, including Monster High, rose 28 percent.
Profit growth was aided by gross margin widening by 0.1 percentage points to 53.8 percent thanks to the sales gains in girls brands and price increases to offset higher costs for raw materials, Chief Financial Officer Kevin Farr said on the conference call.
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