Mattel reported first quarter 2013 earnings on Wednesday. The El Segundo, Calif.-based toymaker, the world's largest, brought in nearly $1 billion in revenue as its financial performance improved over the same quarter last year.
But Barbie, the company's best known product, continued to struggle.
Net sales were $995.6 million, up 7 percent from $928.4 million in the first quarter of 2012. Profit increased dramatically, to $38.5 million from $7.8 million — 11 cents per share versus last year's 2 cents per share.
Mattel's American Girl products, a popular line of dolls and accessories, led the way with gross sales for the quarter of $100.5 million, a 32-percent increase year over year. The Monster High dolls also enjoyed a solid quarter.
“Overall, 2013 is off to a solid start, demonstrating the strength of our global portfolio of brands, countries and customers, said Bryan Stockton, Mattel chairman and CEO. "We are very pleased with the performance of our Girls portfolio and the strong results across all regions.”
On a conference call with analysts, Stockton commended the toy industry for defying tax increases and global economic turmoil and said that the quarter came in about as expected. He also said the best is yet to come for Mattel, as the first quarter is viewed as a lead-up to the main selling season at the end of the year.
Barbie, however, continued of losing streak that stretches back several quarters, with an overall sales decline of 2 percent compared with the first quarter of 2012. Mattel chalked that up to global currency exchange differences and said that the company wasn't reading too much into he iconic doll's lagging performance relative to other brands.
But Barbie may have bigger problems than fluctuating exchange rates.
"The essential problem with Barbie is that she's a white doll in a country that's becoming progressively of color," said Richard Gottlieb of Global Toy Experts, a New York-based consultancy for the toy industry. "She doesn't translate."
He called the the Monster High dolls, by contrast, "racially ambiguous," and pointed out that the competitive Bratz dolls — made by MGA Entertainment and the subject of a contentious intellectual property lawsuit with Mattel — are also appealing across demographic groups.
Stockton said that Barbie remains a strong brand and stressed that sales are higher than they were before the launch of Monster High dolls.
Gottlieb agreed that Mattel's big picture is impressive. "They've done a very good job for two or three years of stepping out and creating new and powerful brands."
He added that Mattel continues to be a solid company for girls' toys and that the relaunch of Max Steel — a toy that was discontinued in the U.S. a decade ago but that has been performing well in South America — later this year bodes well for the company as it strives to create what Gottlieb called an "evergreen" brand for boys.
"In the traditional toy industry, there's more supply of play than there is demand," Gottlieb said. "Toys in the 20th century had a lock on play, but in the 21st century traditional toys have to share space in children's minds with digital options."