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The Race is On Between Mattel and Hasbro

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The Race is On Between Mattel and Hasbro

July 21 2015, 07.16am GMT

STOCK.com

Hasbro Inc. is making big inroads by increasing its share of the international toy market at the expense of rival manufacturer Mattel Inc.

Mattel’s second quarter report indicated that gross sales were up 1% in constant currency, but the strong dollar (USD) resulted in an actual drop in sales of 6%.

Mattel Chairman and CEO Christopher Sinclair said that in the 2nd quarter, Mattel made solid progress in returning the company to improved profitability and growth. Sinclair also added that Mattel’s second quarter results met expectations with improved performance across the company’s core brands. In addition, strong momentum in emerging markets like China and Russia were evident. According to Sinclair, Mattel is currently still in the early phase of their turnaround effort to becoming “more competitive in the growing global toy industry.”

By contrast, Hasbro reported second quarter sales increased by 1% despite the 9% negative currency effect on international sales.

Hasbro Chairman, President and CEO Brian Goldner stated that their second quarter results reflected a positive start to the year and a good underlying momentum was evident in the company’s partner and franchise brands worldwide. Goldner went on to say that Hasbro’s execution of their brand blueprint strategy, including their recent decision to sell Hasbro’s final manufacturing locations and the continued development of new relationships in content development, will assist in transforming Hasbro into an organization focused on global brand building. Goldner said, “We are well positioned for the remainder of 2015, but importantly we continue to develop our capabilities for the long-term execution of our strategy toward unlocking the full potential value of our brands.”

Mattel is the story of a company which suffered from a corporate culture where the bottom line became more important than the creativity. While the company is now in a turnaround phase, trying to revive the fortunes of brands such as Barbie and Fisher-Price, sales of the Barbie range fell by 19% in the second quarter.

Meanwhile, Hasbro is surging ahead with popular products such as Play-Doh and its ties to strong movie properties such as the Marvel superheroes and Star Wars. Hasbro is also contemplating the takeover of Disney Co.’s coveted princess and “Frozen” licenses from Mattel next year. Brian Goldner believes that Hasbro can outperform Mattel in handling the Disney partnership, noting that retailers are already pleased with Hasbro's plans for the product line.

In addition, Hasbro showed growth in its boys division sales of 1.5% while the girls business plunged by 22%. The introduction of the Disney princess range next year will no doubt go a long way towards recovering market share for the girls division.

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