Earnings Preview: Mattel to report 1st-qtr results

Analysts expect early Easter helped lift profit in Mattel's seasonally slow March quarter

Associated Press

NEW YORK (AP) -- Analysts expect that an earlier Easter may have helped lift profit in Mattel Inc.'s seasonally slow first quarter.

The country's largest toy maker reports results before the market opens on Wednesday.

WHAT TO WATCH FOR: Easter falling on March 31 this year may have helped toy sales in the January-March quarter, but Americans worried about higher payroll taxes and still-high unemployment may have curtailed their spending.

Cold weather during the quarter could also have affected outdoor toys like Mattel's Power Wheels.

BMO Capital Markets analyst Gerrick Johnson said he thinks first-quarter U.S. toy sales were unchanged from last year.

Sales of Barbie, one of Mattel's biggest brands, have dropped for three out of the past four quarters, so Johnson will be watching for signs of whether the brand is entering a sustained decline rather than just dealing with a few choppy quarters.

"So far, we think things look okay at retail," in terms of Barbie, he said. "We have not seen any sort of decline in sales of accessories, especially clothes, which is usually the first sign of the brand's decline."

Mattel's other brands include Monster High dolls and Thomas and Friends playsets.

WHY IT MATTERS: Toys, unlike food and shelter, are not necessities, so how well they are selling indicates how confident consumers feel about the state of the economy and their finances.

WHAT'S EXPECTED: Analysts expect net income of 8 cents per share on revenue of $984.2 million.

LAST YEAR'S QUARTER: The El Segundo, Calif.-based company earned 2 cents per share on revenue of $928.4 million.

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