Mattel raises toy prices to fight higher costs

EL SEGUNDO, Calif. – Prices of Mattel Inc. toys like Barbie dolls and Hot Wheels cars have gone up as the company tries to compensate for increasing costs for materials such as resin and rising wages in China.

The world’s largest toy company, which sees input, labor and transportation costs rising in 2012, said on Tuesday that it had raised prices at a mid-single-digit rate on January 1 with the goal of keeping gross margins at around 50 percent.

The news came on the same day Mattel reported a higher-than-expected quarterly profit, sending its shares to their highest level since 1998.

“Nobody likes to take prices up,” said CEO Bryan Stockton. “Having said that, we’re all seeing the same kind of commodity increases, whether it’s in transportation costs, labor etc. So I think generally there is an understanding of the situation across the board.”

Stockton replaced long-time CEO Robert Eckert at the end of last year.

Mattel also set a first-quarter cash dividend of 31 cents a share, reflecting an annual payout of $1.24. That represents a 35 percent increase from last year.

While tight cost controls did boost the company’s profit in the fourth quarter, a stronger dollar and weakness in its Fisher-Price business hurt revenue in the period covering the Christmas selling season.

This year will be another when consumers and retailers will be “a little cautious,” Stockton said on Tuesday.

Mattel Q3 sales beat estimates, helped by sales of Barbie dolls

LOS ANGELES ― Mattel Inc., the world’s largest toy company, reported higher-than-expected quarterly sales, helped by favorable exchange rates and strong sales of its Barbie dolls.

However, third-quarter profit at the company was in line with estimates, as higher input costs pulled down gross margins.

Third-quarter net income was $300.8 million, or 86 cents a share, compared with $283.3 million, or 77 cents a share, a year ago.

Net sales rose 9 percent to $2.0 billion.

Analysts, on average, had expected earnings of 86 cents a share, before special items, on revenue of $1.97 billion, according to Thomson Reuters I/B/E/S.

Gross margins in the quarter fell to 47.8 percent from 51.1 percent in the year-ago period.