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$17.22 0.08 (0.47%)
7/3/2008 1:02 PM

Mattel, Inc. (MAT)

CAPS Rating:
***

The Company designs, manufactures and markets variety of toy products worldwide through sales to its customers and directly to consumers.

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Avatar NetscribeGames (20.08) Submitted: 12/02/06 8:58 PM : Outperform Start Price: $21.99 MAT Score: -11.99

Zip Zap Zoom!!! Mattel, Inc. is the world’s largest toy company and holds around 20% of the U.S. market share along with leading positions in most countries. The company’s international sales contribute a share of around 46% in the overall company revenue, with domestic market contributing the rest (54%).

The company’s business is mainly divided into three segments: Mattel Girls and Boys Brand, Fisher Price Brand, and American Girls brand. Fisher Price with its sub brands like Baby Gear, Barney, and Power Wheel, generate almost half of the company’s overall revenue, while, the iconic Barbie franchise contributes around 24% of the rest.

The company has been facing pressure in areas of production cost, including oil based resin and zinc prices, however in the past few quarters, prices have been showing a stable trend, which has led to improvement in margins. This trend appears to continue in the next year also.

Barbie sales also showed encouraging signs, with U.S. sales increasing for the third consecutive quarter. Moreover, launch of T.M.X. Elmo is set to drive company’s growth in future. With 250,000 units sold in less than 24 hours, the toy is said to be a huge success in the coming holiday season.

However, the toy industry, specially the boys’ toys segment has been facing increasing competition from video games. Furthermore, some retailers are tightening inventories and closing non-viable stores, which are creating some concerns.

Nevertheless, overall future of the industry looks appealing with the increasing purchasing power of American kids, which is set to reach $21.4 billion by 2010. In addition, considering the position of Mattel as the market leader, its strong brands, and reasonable valuation, it is surely set for a zip zap zoom.

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Avatar NetscribeGames (20.08) Submitted: 4/16/07 4:08 AM

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Mattel is currently witnessing a solid performance with revenues registering a rise of 9% in 2006. Led by strong sales in Mattel Girls & Boys Brands segment and Barbie sales finally showing a sign of recovery, MAT is poised for an interesting year. While in the fourth quarter the Fisher-Price segment, witnessed a sturdy 16% growth as a result of splendid sales of TMX Elmo. Moreover, it was the net income growth in the fiscal 2006 that appealed the most, rising by a whopping 42%, as a result of improved margins and favorable impact from changes in currency exchange rates.

Mattel appears set to introduce a new miniature car collection called as Polly Wheels, the first-ever toy cars designed exclusively for girls. With car colors like Splashing Pink and Glittery Peach and small removable Polly Pocket doll, the company is trying to recreate its Hot Wheels magic in the girls segment, and will be something to watch out for in the future. In addition the company appears to be eyeing for acquisition of the German doll maker Zapf Creation having a range of strong brands in the German market.

The company’s stock price in 2007 has surged by a massive 28%, led by strong results and its positive outlook. Looking ahead, the products like Cars and TMX Elmo will continue to be the key growth generators for the company. The introduction of a new historical doll in the fall season also has a potential to create a similar success. Adding to it, the improving margins, recovering Barbie sales and hugely successful brand base, makes Mattel a strong investment and will continue to grow from stride to stride in the coming years.

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