Mattel: Seeking a Buyer

Kaitlyn is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.

Mattel's iconic brand Barbie listed her house on Trulia for 25 million dollars. This imaginary house is part of a campaign to revitalize the Barbie brand for Mattel while continuing to make Barbie the number one doll property in the world. Mattel (NASDAQ: MAT), has long stood as an icon of the American toy industry with Barbie at the helm of its product line. Mattel continues to push record sales growth in a new and emerging markets as traditional toys expand to online gaming. 

Mattel recently released its fourth quarter 2012 results in which gross sales were up 5% from the prior year for the North America region, and up 4% internationally to 3.1 billion dollars.  According to Mattel, the international middle class is going to grow from 569 million households to 766 million households in 2020. This is a huge emerging market for toy companies to expand, with strong brand recognition in emerging markets such as China and India.

Planning For Strategic Growth: Category Growth Worldwide  

The toy category is growing rapidly on a global scale. From 2008-2011 the toy category grew by 4%, and in 2012 alone, the category grew by 4% internationally. In the United States the toy category spiked by 1.2% after flat sales all year long.  Mattel is strategically positioning itself to expand on a global scale by unique brand positioning and investing heavily in a strong online presence. With the help of its partner Disney (NYSE: DIS), Mattel has expanded product lines to produce film based toys including Cars, Turbo, Frozen, and Batman to drive further market share. 

Disney continues to produce movies that are profitable for Mattel, with new hit movies being released every year allowing for new toy distribution lines. Disney continues to grow with ownership in media networks, parks and resorts, studio entertainment, and consumer products.  The Walt Disney Studios release schedule for 2013 includes; Iron Man 3, The Lone Ranger, Frozen, and Saving Mr. Banks.  ESPN continues to grow with the new release of WatchESPN, ABC delivered 3 of the top 10 scripted series, and Disney Channel took the top spot among kids 2-11.

Competitive Edge: Going Digital 

Mattel is embracing new digital opportunities to expand into the growing digital toy market as well. With competitors like Hasbro (NASDAQ: HAS)  following the online digital trend, Mattel is rapidly growing new product lines to push into new and emerging markets.

Hasbro, Mattel’s strongest competitor has a broad portfolio of brands which includes games and puzzles, television programming, and toys and action figures. Hasbro continues to grow internationally, but predicts slow growth for 2013. As profiled in the latest quarterly earnings call, 2012 net revenues were down 2%, and down 6% annually. Some of their brands include My Little Pony, Play-Doh, Furby, and Sesame Street. Their plans for 2013 include expanding to China, Russia and Brazil with focusing on their franchise brands to lead product growth.

Mattel has created a strong digital presence with social media, online video content, gaming, and downloadable apps. As well, Mattel has blended online components with the Barbie and Fisher Price brands as well as adopting ecommerce with a large number of brands. As well, Mattel has embraced e-commerce as a way to leverage sales and launch new product lines on a global scale.

Investment To Shareholders: Delivering Constant Growth

Mattel's commitment to shareholders to drive growth held true in 2012, with a positive outlook in 2013 for market Pushing for new market expansion what is driving Mattel to lead the charts with innovative new products, and rapid category growth. Mattel firmly believes that their global growth footprint, a strong balance sheet, their placement in industry markets, and flexibly of a short cycle of product development will continue their cycle of expanded product growth.  

ktokay has no position in any stocks mentioned. The Motley Fool recommends Hasbro, Mattel, and Walt Disney. The Motley Fool owns shares of Hasbro and Walt Disney. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. Is this post wrong? Click here. Think you can do better? Join us and write your own!

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