Mattel Sales Ride 'The Dark Knight' Headwinds

Sarah Mahoney

MediaPost

July 21, 2008

There's plenty to be perky about at Mattel these days. On the heels of a massive legal victory against Bratz, Barbie's nemesis, the company reported strong second-quarter sales, buoyed by toys pinned to "Batman: The Dark Knight."

The toy marketer says worldwide net sales gained 11% in the second quarter to $1.11 billion, while U.S. sales gained 3%. Global sales at both Fisher-Price and American Girl--which got a big boost from new stores and the Kit Kittredge movie--jumped 10%; Hot Wheels achieved a 5% increase.

Net income for the El Segundo, Calif.-based company fell to $11.8 million, compared to last year's second-quarter net income of $22.8 million.

"We expected the positive contribution from toys tied to the summer entertainment properties 'Batman: The Dark Knight,' 'Speed Racer' and 'Kung Fu Panda'," the company says in its release. "And we also achieved nice growth in several of our key core brands. International markets continue to lead the way, but the U.S. business also posted solid performance in the quarter."

And if predictions for Warner Bros.' "The Dark Knight" pan out, the latest Batman sequel toys will provide plenty of continuing coattails for product tie-ins. Variety, for example, reports that the film has a shot at opening as high as Disney's 2006 "Pirates of the Caribbean: Dead Man's Chest," with $218.4 million.

Mattel's Barbie, however, is still in a major midlife crisis, with worldwide sales on Barbie products sliding 6%. But Mattel won a major victory over MGA Entertainment, which markets Bratz. A federal court ruled that the majority of Bratz design drawings, prototypes and sculpts were created by a doll designer while he was employed by Mattel.

In the trial's next phase, Mattel says, the same jury will be asked to rule whether Bratz dolls actually infringe on the drawings that are now owned by Mattel. If so, jurors will then determine the amount of damages due Mattel.