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At a Glance

Uppers

The world's number one toy maker.

The company is on a roll, having posted good results in recent years.

Downers

The company has been involved in several controversies including product recalls.

Fierce competition from rival toy makers including Bandai, Hasbro, Leap Frog, Lego and other.

The Bottom Line

The world's number one toy maker is doing a lot of the right things right now and is poised to remain in the top spot for years to come, but it faces plenty of challenges.

About Mattel, Inc.

Mattel is one of the largest toy makers in the world. Its products include Barbie and Polly Pocket dolls, Fisher-Price and Thomas & Friends toys, Hot Wheels and Matchbox cars, and American Girl dolls and books. Mattel also sells action figures and toys based on Walt Disney, Warner Bros., and NBCUniversal movies, WWE Wrestling, Nickelodeon characters, and the popular Minecraft video game. Other products include games (UNO), educational toys, and puzzles. Mattel is trying to reduce its reliance on its biggest customers — Walmart and Target — through internet sales and by branching into media licensing of its popular brands. The North America region accounts nearly 55% of sales.

Operations

Mattel operates three business segments: North America, International, and American Girl.

The North American segment, which makes up nearly 50% of Mattel's total sales, markets and sells toys in the US and Canada through the Power Brands and Toy Box categories. Power Brands toy lines include Barbie fashion dolls, Hot Wheels, and Fisher-Price and Thomas & Friends. The Toy Box category includes both Mattel-owned brands and licensed partner brands. Owned Toy Box brands include MEGA, Polly Pocket, and Enchantimals, while partner Toy Box products have ties-ins with the likes of Disney, WWE Wrestling, Nickelodeon, and Warner Bros.

Products marketed by the International segment (some 45% of sales) are generally the same as those in the North America segment, although some are tweaked for international markets. Mattel's products are sold directly to retailers and wholesalers in Europe, Latin America, and Asia, Australia, and New Zealand, and through agents and distributors in those countries where Mattel has no direct presence.

The American Girl segment (about 5% of sales) is a direct marketer, children's publisher, and retailer of the American Girl line of historical and contemporary character dolls, books, and accessories. The segment also makes products under the Truly Me, Girl of the Year, and Bitty Baby brands.

Geographic Reach

El Segundo, California-based Mattel fills toy chests in more than 150 countries. The toymaker sells products across North America, Europe, Latin America, and Asia. North America accounts for more than a half of total sales. Europe is the company's second-largest market, generating about 25% of Mattel's total sales. Latin America accounts for about 15% and Asia Pacific brings in just about 10%.

Sales and Marketing

In its North America segment, products are sold U.S. and Canada across categories. The International segment sells directly to retailers and wholesalers in Europe, Latin America, Asia, Australia, and New Zealand. Mattel's American Girl segment sells products directly to consumers via its catalog, website, in its proprietary retail stores in the US, at select retailers nationwide, and at specialty boutiques and franchise stores in Canada, Dubai, and Bahrain. The company's two largest customers –- Walmart and Target – together account for more than 30% of sales.

Mattel capitalizes on major events, such as movie releases, by focusing on product tie-ins. It also promotes its toys and characters through online and broadcast media.

Mattel incurred advertising and promotion expenses of $551.5 million (12.2% of net sales), $524.3 million (11.6% of net sales), and $642.3 million (13.2% of net sales), respectively.

Financial Performance

Mattel's revenue has been in steady decline the last five years, falling 21% between 2015 and 2019.

Net sales for 2019 were $4.50 billion, as compared to $4.51 billion in 2018. Net loss in 2019 included the impact of approximately $38 million related to the inclined sleeper product recalls.

Mattel posted a net loss of $214 million 2019, a decrease of 59% to $533.3 million in 2018. Net loss was primarily due to higher gross profit and lower selling and administrative expenses.

Cash at the end of 2019 was $630.0 million, a decrease of 6% from the prior year. Cash from operations contributed $181 million to the coffers, while investing activities used $114.2 million, mainly for purchases of other property, plant and equipment. Financing activities used $33.1 million, primarily for payments on long-term borrowings.

Strategy

After losing one of its biggest customers when Toys "R" Us liquidated in early 2018, Mattel is focused on the following two-part strategy to transform Mattel from a toy manufacturing company into an intellectual property (IP) driven, high-performing toy company. In the short- to mid-term, restore profitability by reshaping operations and regain topline growth by growing Mattel's Power Brands (Barbie, Hot Wheels, Fisher-Price and Thomas & Friends, and American Girl) and expanding Mattel's brand portfolio. In the mid- to long-term, capture the full value of Mattel's IP through franchise management and the development of Mattel's online retail and e-commerce capabilities.

In early 2020, American Girl introduced its newest Girl of the Year character, Joss Kendrick, a fierce athlete born with hearing loss and a passion for surfing and competitive cheer. Throughout 2020, American Girl will focus on its mission to build girls of strong character through immersive storytelling; differentiated, premium experiences; and the company's commitment to service and quality.

Current and future commitments for guaranteed payments reflect Mattel's focus on expanding its product lines through alliances with businesses in other industries. Additionally, Mattel routinely enters into noncancelable lease agreements for premises and equipment used in the normal course of business.

Company Background

A small California toy manufacturer began operating out of a converted garage in 1945, producing dollhouse furniture. Harold Matson and Elliot Handler named their new company Mattel, using letters from their last and first names. Matson soon sold his share to Handler and his wife, Ruth, who incorporated the business in 1948.

The company's toy line had expanded by 1952 and sales exceeded $5 million. Sponsorship of Walt Disney's Mickey Mouse Club (debuted 1955), a first in toy advertising.

In 1959 Mattel introduced the Barbie doll, named after the Handlers' daughter, Barbara, and later introduced Ken, named after their son. Barbie, with her fashionable wardrobe and line of accessories, was an instant hit.

Mattel went public in 1960, and within two years sales had jumped from $25 million to $75 million. It launched the popular Hot Wheels miniature cars line in 1968.

The Handlers were ousted from management in 1974. The new management moved into non-toy businesses, adding Western Publishing (Golden Books) and the Ringling Brothers-Barnum & Bailey Combined Shows circus in 1979.

In April 2011 a federal jury sided with MGA Entertainment in the long-running legal battle over ownership of the billion-dollar Bratz doll franchise. The jury rejected Mattel's copyright infringement claims. Instead, it found that Mattel has stolen trade secrets from MGA.

Mattel, Inc.

333 Continental Blvd
El Segundo, CA 90245-5032
Phone: 1 (310) 252-2000

Firm Stats

Employer Type: Publicly Owned
Stock Symbol: MAT
Stock Exchange: , NASDAQ
President and COO: Richard Dickson
CEO: Margaret H. Georgiadis
Chairman: Christopher A. Sinclair
Employees (This Location): 1,700
Employees (All Locations): 24,000

Major Office Locations

El Segundo, CA

Other Locations

El Segundo, CA
Los Angeles, CA
San Bernardino, CA
Scottsdale, CA
Lone Tree, CO
Westminster, CO
Miami, FL
Miramar, FL
Orlando, FL
Natick, MA
East Aurora, NY
New York, NY
Old Westbury, NY
Bethlehem, PA
Dallas, TX
Fort Worth, TX
Deforest, WI
Middleton, WI
Wilmot, WI
Bengaluru, India
Guwahati, India
Kolkata, India
Mumbai, India
Nagpur, India
Navi Mumbai, India
Fresnes, France
Issy Les Moulineaux, France
Langeais, France
Tsim Sha Tsui, Hong Kong