Mattel 2014 Annual Report Download - page 39

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International Segment
The following table provides a summary of percentage changes in gross sales within the International
segment in 2014 versus 2013:
% Change in
Gross Sales
Impact of Change in
Currency Rates
(in % pts)
Total International Segment ......................................... –7 –4
Europe ...................................................... –7 –4
Latin America ................................................ –10 –4
Asia Pacific .................................................. 1 –2
The following table provides a summary of Mattel’s gross sales by brand for the International segment for
2014 and 2013:
For the Year
% Change2014 2013
(In millions, except percentage
information)
Mattel Girls & Boys Brands:
Barbie .......................................................... $ 585.9 $ 744.2 –21%
Other Girls ...................................................... 730.4 722.8 1%
Wheels ......................................................... 417.0 395.7 5%
Entertainment .................................................... 460.3 588.5 –22%
2,193.6 2,451.2 –11%
Fisher-Price Brands:
Core Fisher-Price ................................................. 530.9 558.2 –5%
Fisher-Price Friends ............................................... 225.1 246.8 –9%
Other Fisher-Price ................................................. 16.1 16.8 –4%
772.1 821.8 –6%
Construction and Arts & Crafts Brands ............................. 94.5 —
Other .......................................................... 1.3 4.8
Total Gross Sales ............................................. $3,061.5 $3,277.8 –7%
Gross sales for the International segment were $3.06 billion in 2014, down $216.3 million or 7%, as
compared to $3.28 billion in 2013, with an unfavorable impact from changes in currency exchange rates of 4
percentage points. The decrease in the International segment gross sales was due to lower sales of Entertainment
and Barbie products, partially offset by Construction and Arts & Crafts products. Of the 22% decrease in
Entertainment gross sales, 7% was due to lower sales of Max Steel products, 5% was due to lower sales of kids’
games, 3% was due to lower sales of CARS products, 3% was due to lower sales of Superman products, and 3%
was due to lower sales of Disney Planes products. The 21% decrease in Barbie gross sales was primarily due to
competition within the doll category and brand propositions that were not compelling enough to consumers. The
increase in Construction and Arts & Crafts gross sales was due to initial sales of MEGA Brands products. Cost of
sales remained flat in 2014, as compared to a 9% decrease in net sales, as lower product and other costs and
lower freight and logistics expenses were offset by higher royalty expenses. Gross margins decreased due to
efforts to improve consumer takeaway, the impact of the MEGA Brands acquisition, including the impact of the
inventory fair value markup above historical cost, the impact of lower sales volume on Mattel’s fixed cost
manufacturing and distribution base, unfavorable product mix, and higher input costs offset by price increases.
International segment income decreased by 42% to $359.9 million in 2014, as compared to $622.9 million
in 2013, primarily due to lower gross profit and higher other selling and administrative expenses.
33