Mattel, the nation’s largest toymaker, reported that third quarter sales rose 6% from $1.84 billion in Q3 2007 to $1.95 billion.  Aided by a strong performance from toys based on The Dark Knight, Mattel’s profits rose from $236.8 million, or 61¢ per share, to $238.1 million, or 66¢, but still missed analysts’ forecast of 70¢ per share.  But even Hasbro, which beat expectations, saw its stock price decline as analysts and traders worried about the prospect of a potentially dismal 2008 holiday season.

 

Mattel’s Chairman and CEO Bob Eckert took on the marketplace’s fear of a poor Q4 during his opening remarks in Mattel’s Q3 earnings call.  “As I said during past times of high anxiety, my bet is there will be a Christmas," he said.  "Kids will get toys and we’ll sell more toys than anyone else. That’s not to make light of the concerns because they’re real. As you likely heard, retailers are reluctant to make inventory bets and it will be difficult for some of our customers and vendors to obtain the funds they need to buy inventory or raw materials. It will also be hard for parents whose job status and financial well being are uncertain. As we’ve done in the past we’ll need to adjust accordingly.”

 

Though worldwide sales of Mattel’s flagship brand Barbie declined 1% during the quarter, boys’ toys were up both in the Wheels category, where Speed Racer made a much bigger impact in the toy aisle than it did at the box office, and in Mattel's Entertainment category, where it was The Dark Knight that helped drive sales.  As CFO Kevin Farr put it during the conference call: “Worldwide sales in our Entertainment business which includes games and puzzles increased 3% including a four percentage point positive impact from changes in foreign exchange. The growth in Entertainment was primarily attributable to Batman: The Dark Knight which more than offset the decline in Cars, a property that continues to demonstrate evergreen status at retail.”

 

The Dark Knight was not the only motion picture driving Mattel’s sales.  Sales of the company’s American Girl deluxe dolls and books were up 11% for the quarter due in part to the release of the Kit Kitteredge: An American Girl movie and the opening of American Girl retail boutiques in Dallas and Atlanta.