Mattel Reports Third Quarter 2010 Financial Results

Third Quarter Highlights

• Worldwide net sales increased 2 percent;
• Domestic gross sales increased 3 percent and international gross sales increased 2 percent;
• International gross sales increased 2 percent;
• Worldwide gross sales for core brands: Barbie® up 6 percent; Hot Wheels® down 3 percent; Core Fisher-Price® down 10 percent and American Girl® brands up 2 percent;
• Operating income was $358.6 million compared to operating income of $336.5 million in the third quarter of 2009.

Mattel Inc. today reported 2010 third quarter financial results. For the quarter, the company reported net income of $283.3 million, compared to last year's third quarter net income of $229.8 million.

"We continue to be pleased with the performance of the business," said Robert A. Eckert, chairman and chief executive officer of Mattel, Inc. "While the all-important holiday season is still in front of us, we remain on track to deliver solid revenue and profit growth driven by our portfolio of brands and countries."

Financial Overview
For the quarter, net sales were $1.83 billion, up 2 percent compared to $1.79 billion last year. On a regional basis, third quarter gross sales increased 3 percent in the U.S. and increased 2 percent in international markets. Operating income for the quarter was $358.6 million, compared to prior year's operating income for the quarter of $336.5 million.

Sales by Business Unit

Mattel Girls and Boys Brands
For the third quarter, worldwide gross sales for the Mattel Girls & Boys Brands business unit were $1.17 billion, up 8 percent versus a year ago. Worldwide gross sales for the Barbie® brand grew 6 percent compared to last year. Worldwide gross sales for Other Girls Brands were up 7 percent, driven primarily by strong performance of the Disney Princess™ doll line and the introduction of the Monster High doll line. Worldwide gross sales for the Wheels category, which includes the Hot Wheels®, Matchbox® and Tyco R/C® brands, were down 5 percent. Worldwide gross sales for the Entertainment business, which includes Radica® and Games and Puzzles, increased by 23 percent for the quarter, mostly attributable to growth in the Toy Story® 3 and World Wrestling Entertainment properties.

Fisher-Price Brands
Third quarter worldwide gross sales for the Fisher-Price Brands business unit, which includes the Fisher-Price® Core, Fisher-Price® Friends and Power Wheels® brands, were $743.4 million, or down 5 percent versus the prior year, primarily due to declines in Fisher-Price® Core and Power Wheels®, which offset gains in Fisher-Price® Friends, primarily driven by products supporting evergreen entertainment properties such as Thomas and Friends® and the new product introduction of Sing-A-Ma-Jigs!™.

American Girl Brands
Third quarter gross sales for the American Girl Brands business unit, which offers American Girl® branded products directly to consumers, were $84.4 million, up 2 percent versus last year, reflecting the benefit of the opening of two new boutique stores in Denver and Kansas City and the retiring of historical character, Felicity, to the American Girl Archives, as well as the launch of the My American Girl line, a re-positioning of the contemporary line featuring a doll configurator and virtual world.