Barbie’s lived high on the hog for generations now, riding around in her own beach buggy, horse and carriage, private jet, Vespa. When she hasn’t been traveling in style, she’s been hanging out by the pool or in her three-story, pinkariffic dream townhouse.
But she may need to put away her fancy dresses and modes of transport for the time being, roll up her sleeves, and get her well-manicured fingers to work. (To that point, she's now making another run at the White House with a presidential glampaign.)
In the first three months of this year, for the first time in 10 quarters, sales of Barbie products went down for Mattel, which directly hurt the company’s bottom line, according to Bloomberg Businessweek. Part of the explanation: Toys “R” Us and Walmart cut back on Barbie products in the first quarter, and a few other Mattel lines, such as Hot Wheels, Cars, and Fisher-Price, didn’t do so well, either.
Sales in the first quarter went down 2.5 percent to $928.4 million. “This was definitely a considerably worse performance than expected at the top line,” Sean McGowan, an analyst for Needham & Co. in New York, commented to BW. However, the first quarter is the least important to Mattel’s annual numbers so investors (and Barbie fans) needn't fret that the dream house is going into foreclosure any time soon.
But if sales of Barbie dolls, DVDs and merchandise continue to decline, Mattel could run into some trouble. “Gross sales of Barbie products, which fell 6 percent globally and 9 percent in the U.S. during the quarter, were particularly affected by the retailers’ inventory cuts,” BW adds.
One area that is doing very well is the Monster High line of dolls, which launched in 2010. The ghoulish yet happy group of teen monsters (offspring of famous monsters such as Dracula, the Werewolf and other spooks) give off much more a stuffed-animal vibe than the materialistic feel Barbie is often accused of possessing.
Mattel CEO Bryan Stockton told investors Tuesday that the Monsters High dolls are now the number-two line of dolls in the U.S. behind American Girl, Mattel's more traditional line of dolls that has grown for seven straight quarters, according to SeekingAlpha's transcript of Mattel's Q1 earnings call. That's why the company is expanding its American Girl retail footprint by opening more stores, while no such plans are afoot for Barbie and her pals.
As CFO Kevin M. Farr comemnted on the first quarter, “From a brand perspective, core brands like Barbie and Hot Wheels were down mid-single digits, but were partially offset by the strength of American Girl and Monster High.”
As long as Mattel has so many brands to spread around — it's also ingesting its Thomas the Tank Engine-driven acquisition of Britain's HIT Entertainment, dealing with the drop-off in Cars-related merchandising and figuring out China like every other brand on the planet — it should be OK.
Unless, of course, Mattel's flagship doll continues to take a nosedive in sales, in which case President Barbie may need to lay down the law with a few hormone-happy teen monsters.