Wednesday, March 07, 2012

Nickelodeon And Fisher-Price Renew Their Global Licensing Partnership For Preschool Toys Based on Nickelodeon's Preschool Properties

From Kidscreen:
Fisher-Price and Nick re-up licensing partnership

US preschool toy giant and Mattel brand Fisher-Price and Nickelodeon have signed a multi-year renewal of their global licensing partnership for toys based on the network’s preschool properties.

The new agreement covers a range of product categories such as infant and preschool toys, plush, figures, preschool vehicles and playsets.

Already announced is a new toy line developed for the preschool series, Team Umizoomi, as well as a gymnastics-inspired Dora the Explorer whose retail launch will coincide with the 2012 Olympic Games.

Tags: Dora the Explorer, Fisher-Price, Mattel, Nickelodeon, Team Umizoomi
Also, from Seeking Alpha:
Mattel's CEO Discusses Q1 2012 Results - Earnings Call Transcript

Mattel (MAT) Q1 2012 Earnings Call April 16, 2012 8:30 AM ET


Good day, ladies and gentlemen, and welcome to Mattel's First Quarter 2012 Earnings Conference Call. [Operator Instructions] As a reminder, today's conference call is being recorded. I'd now like to turn the conference over to your host, Mr. Drew Vollero, Senior Vice President of Corporate Strategy and Investor Relations. Please go ahead, sir.

Drew Vollero

Thanks, operator. As you know, this morning, we reported Mattel's first quarter financial results. We've provided you with a slide presentation to help guide our discussion today. The slide presentation and the information required by Regulation G regarding non-GAAP financial measures is available on the Investors & Media section of our corporate website,

In a few minutes, Bryan Stockton, Mattel's CEO; and Kevin Farr, Mattel's CFO, will provide comments on the results, and then the call will be opened for your questions.

Certain statements made during the call may include forward-looking statements related to the future performance of our overall business. These statements are based on currently available information, and they are subject to a number of significant risks and uncertainties, which could cause our actual results to differ materially from those projected in the forward-looking statements.

We describe some of these uncertainties in the Risk Factors section of our 2011 annual report on Form 10-K and in our 2012 quarterly reports on Form 10-Q as well as in other filings we make with the SEC from time to time. Mattel does not update forward-looking statements and expressly disclaims any obligation to do so.

Now, I'd like to turn the call over to Bryan.

Bryan G. Stockton

Thank you, Drew, and good morning, everyone. Last week marked my 100th day as Mattel's Chief Executive Officer. During those first 100 days, I shared with you Mattel's plan to achieve consistent long-term growth and continued strong financial performance. We're aligning behind 4 key initiatives: plan for growth, structure for growth, nurture our talented and accelerate an already innovative culture. I'm pleased to say that after the first 100 days, we made some great progress towards achieving these goals.

Let me touch on some of these areas, starting with plan for growth. As we've told you before, Mattel will focus on 4 key growth strategies: growing core brands, building new franchises, optimizing our entertainment partnerships and expanding our international footprint. The big news with core brands is the addition of our newest core brand, Thomas & Friends. I'll discuss our plans for Thomas in a few minutes.

We're also continuing to extend our core brands. We recently announced 2 multi-year global licensing partnerships for Barbie and Hot Wheels-themed products, a license with MEGA Brands to develop construction toys and a license with Crayola to develop Barbie and Hot Wheels-themed arts and crafts products, including an app that turns the iPad into an interactive coloring book.

In our Entertainment business, we're very excited to have recently extended the Disney Princess license for North America and Latin America and have expanded the scope to include emerging markets such as Eastern Europe, Turkey, Greece as well as the Middle East and Africa. Disney Princess has been a strong performer for Mattel and is a solid fit within our Girls portfolio. And earlier this year, we announced the renewal of a multi-year global licensing partnership with Nickelodeon to develop toys based on Nickelodeon's preschool programs.

We're also growing internationally. We're driving our international growth by making disciplined, strategic investments in infrastructure and brand building. As you'll recall, we made a long-term strategic investment in Brazil, and it paid off in a big way. Brazil is now our second largest country in sales after the U.S. We’ve made great progress in both India and China. And earlier this year, in line with our emerging markets strategy, we transitioned from a distributor model to a wholly owned Mattel subsidiary with the opening of our office in Russia. We'll apply levels of investment and discipline into Russia consistent with the opportunity, and we believe we are well positioned for growth in this important BRIC country.

To support our plan for growth, we're also structuring for growth. The newly created North America division and global brand teams have been up and running since January 1. Our North America division now has a team of people fully dedicated to running the commercial part of our business. This brings decision making much closer to consumers and customers in this important geography.

Our global brand teams are now sharply focused on global brand building and product design to better meet the unique needs of consumers and customers by geographic region. Forming global brand teams and applying the international subsidiary-like approach to North America enables us to focus resources to grow the business more rapidly.

But even with the best plan and structure, it all comes down to people. Nurturing our talent is the key focus at Mattel. Earlier this year, I appointed Jean-Christophe Pean to lead our newly formed North America division. Jean-Christophe has been with Mattel since 1998 and has successfully served in a variety of key leadership roles, including Senior Vice President and General Manager of Asia Pacific and Vice President and General Manager of the U.K. I'm confident that Jean-Christophe will leverage his extensive global sales and marketing experience to lead and grow this important aspect of Mattel's business.

Last week, Ellen Brothers announced her plan to retire from American Girl at the end of the year. We thank Ellen for the outstanding job she's done over the past 12 years, leading the American Girl team to achieve the $0.5 billion sales mark, and congratulate Ellen on her planned retirement.

Jean McKenzie, Senior Vice President of marketing at Mattel, has been named Ellen's successor. Jean has a proven track record in brand-building in the areas of literacy, learning and girls' toys. While Jean has worked for companies such as Disney and Gateway Learning Corporation, the owner of the award-winning Hooked on Phonics brand, she also knows a lot about Mattel. In fact, early in her career, Jean was the general manager of the Barbie brand.

During the next 5 months, Ellen and Jean will begin making the leadership transition. Jean will assume the leadership role of American Girl on September 1, and Ellen will remain on as an adviser until the end of 2012.

We've made some really good strategic progress in the first 100 days. Now let's switch our focus to the quarter. While Kevin will provide a more detailed financial review, from my perspective, the quarter played out pretty much as we had anticipated. We carried over momentum in our portfolio of brands and countries into the first quarter. Through February 2012, we gained overall NPD toy category share across the U.S. and in Europe with Barbie and Hot Wheels gaining share in both regions. Monster High is doing extremely well globally and is now the #2 fashion doll year-to-date February in the U.S. and in Europe according to NPD. And we're sold out in many markets. This quarter also marked American Girls' seventh consecutive quarter of growth.

We continue to see growth internationally. For the quarter, we saw growth across all regions. Our Latin American business is doing particularly well as it has for the last few years. And our European business continues to perform well, despite the stiff economic challenges there, gaining NPD share through February.

Complementing our growth focus is an emphasis on costs and gross margins. For the quarter, gross margins were consistent with our long-term goal of about 50%, and we remain on track to deliver our Operational Excellence 2.0 savings target of $175 million.

That said, we know we have work to do in North America and with Fisher-Price. In North America, our shipping volume declined versus last year, primarily driven by 2 key factors: first, a decline in Cars shipping volume; and second, cautious retailer ordering patterns. Let me touch on each.

More than half of the U.S. shipping decline is attributable to the timing of last year's Cars 2 movie launch. As we discussed, Cars 2 was and will be a first half tail -- headwind for us as retailers were gearing up for the movie launch last year in the first and second quarters. That said, Cars continues to be a great success as an evergreen property, selling well over-the-counter and gaining NPD share in the first 2 months of 2012, both in the U.S. and Europe. Retailers were particularly cautious in their first quarter ordering patterns in the U.S. For the quarter, shipping lagged our POS as retailers reduced inventories. In fact, inventory at our top 4 U.S. customers fell mid- to high single-digit levels. Brands like Barbie experienced some of the most significant gaps between shipments and consumer takeaway.

Despite that, we continue to have the toy brands that consumers choose more often. Barbie, Hot Wheels, Monster High and Cars all gained NPD share in the U.S. through February 2012.

Fisher-Price remains a work in progress as we continue to execute our strategy to transition and globalize the brand. Overall, Fisher-Price shipping was flat for the quarter, which includes the benefit of licensed revenue from HIT Entertainment. International results at Fisher-Price were up 8% for the quarter, and we continue to see a big opportunity for the brand outside the U.S.

We continue to make good progress combining the HIT business with Mattel. The core leadership team at HIT is now in place and working under the direction of David Allmark, Executive Vice President of Fisher-Price, who's focused on driving the business forward. Growing Thomas continues to be a top priority, and we're excited about the opportunity to bring together all of the Thomas toy platforms, including die cast, plastic and wood. We're making good progress to successfully transition the wood business from the current licensee to Mattel in 2013.

Smart investments are already being made to roll out an enhanced product portfolio with new play patterns and characters, improved content to drive better brand engagement and align with our key broadcast partners around the world for better placement. We believe that better broadcast placement for Thomas in Latin America and other regions presents a great opportunity to drive brand awareness and sales.

While Thomas was the centerpiece of the acquisition, we're encouraged by the opportunity to create value from other brands in the HIT portfolio. Mike the Knight, for example, was launched on Nickelodeon in the U.S. in February 2012 and is already one of the top 25 shows for 2- to 5-year-old kids across all channels in the U.S. Mike is broadcast internationally on top channels like CBeebies in the U.K., TF1 in France and Super RTL in Germany and has been receiving excellent ratings. Much more to follow on HIT, but we continue to be excited about the opportunity to build the business on a global basis.
You can view the transcript of Mattel's First Quarter 2012 Earnings Conference Call in full here on

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