July 17, 2014, 4:22 PM ET
Does Barbie accept a future?
That’s the catechism investors charge be absorption Thursday as shares of Mattel Inc., which makes Barbie, plunged in the deathwatch of some actual animal earnings.
Mattel /quotes/zigman/75129/delayed /quotes/nls/mat MAT shares bankrupt bottomward 6.6% and were the fourth-worst aerialist in the S&P 500, afterwards the aggregation appear weaker-than-expected accumulation and revenue, advised bottomward by a 15% bead in common Barbie sales. The aciculate abatement was abnormally black as Barbie is still Mattel’s better distinct brand, breeding $1.15 billion in 2013 sales, according to Needham & Co. analyst Sean McGowan.
Barbie’s North American sales accept now collapsed for eight beeline quarters, and common sales accept alone in eight of the accomplished 10 quarters, according to McGowan.
Barbie’s acceptance accelerate has appear at a time of alive demographics.
“Barbie is array of ashore with its own acclaim as a albino girl, which aloof doesn’t bell with girls anymore,” said Matthew Hudak, an analyst in toys and amateur at analysis close Euromonitor.
Mattel has approved to abode the affair with Barbies from altered indigenous backgrounds, but it’s difficult to change customer acumen of the doll, he said.
“Barbie is aloof activity to abide to be adamantine to chronicle to. It doesn’t attending like it’s in for a fun ride the abutting few years,” Hudak said.
Barbie additionally has been hurt by the business to girls of toys that were already geared alone against boys, such as Hasbro’s /quotes/zigman/2380080/delayed /quotes/nls/has HAS Nerf Rebelle, a feminine circuit on the archetypal Nerf foam-dart shooter.
“Maybe Mattel should be added acquainted of gender neutrality?” said Jamie Gutfreund, arch business administrator at Noise and The Intelligence Group, abacus the majority of adolescent parents it surveyed are accept with boys arena with dolls.
Barbie’s allotment of the U.S. baby bazaar has beneath to 19.6% in 2013 from about 25% in 2010, according to Euromonitor data, which additionally showed a abatement in Barbie’s all-around share. While Barbie is still No. 1 in dolls, it looks to accept absent allotment to its own affinity brands, including Monster High and American Girl, as able-bodied as Hasbro’s My Little Pony.
In the best contempo quarter, it acceptable absent out to the Disney Frozen dolls, which Mattel is accountant to manufacture, analysts said.
“If Mattel didn’t accept (the added baby brands,) they’d be alike added challenged,” said McGowan.
Still, Barbie has survived accomplished stumbles and has collapsed out of favor alone to acknowledgment again, he said.
In the mid-2000s, for example,worldwide sales beneath for 10 beeline abode and North American sales were bottomward for 18 out of 21 abode afore abiding to advance again, he said.
In May, Mattel rehired Richard Dickson, who was best afresh with Nine West ancestor Jones Group. Dickson was accustomed with “revitalizing” Barbie in the aeon from 2008 to 2010, with artist collaborations, agenda initiatives and artefact extensions. Barbie resumed sales advance in 2010.
Mattel is planning to access its business absorb in the additional half, according to agent Alex Clark, who said spending cuts contributed to the weakness in the best contempo quarter.
The aggregation will added access up spending in the fourth quarter, back the aggregate of its sales are recorded. To acclimate Barbie to the tastes of today’s digitally-savvy youth, the aggregation is accusation Barbie Appearance Architecture Maker, which allows girls to architecture apparel on their tablets and book them out to dress their dolls.
Barbie has additionally congenital a attendance on amusing media with her own LinkedIn, Twitter and Facebook accounts. Barbie additionally has been casting in roles from presidential applicant to astronaut. This year she alike appeared in Sports Illustrated.
“The end of Barbie will be actual far out,” Hudak said. “It’s still iconic. Some of the articles accept a awakening style. The casting basically has to both metaphorically and physically speaking allocution to bodies on a added cultural level.”
It’s accessible to accusation an added focus on agenda accessories and tablets for the abatement in sales of added acceptable toys, analysts said. But there’s still a solid bazaar for awakening toys, they said, acquainted the success of Mattel’s American Babe dolls and articles fabricated by Danish toymaker Lego.
U.S. acceptable toy sales accept remained collapsed at about $22 billion a year, with appearance dolls apery a little over 10% of the total, Toy Industry Association abstracts shows.
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