Mattel 1998 Annual Report Download - page 6

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40 percent at our top U.S. accounts, and over 60 percent at
Toys “R” Us.
We also put our Fisher-Price business back on course, achiev-
ing a strong return to profitability and an improved inventory
position at retail — down 30 percent from last year.
The most positive outcome of 1998 was that our margins
remained strong, despite the decline in Barbie, as evidenced
by our gross margin of 49.4 percent, off only slightly
from 49.6 percent in 1997. This resulted from improved
margins in our fast-growing Wheels business, the much
improved profitability at Fisher-Price and manufac-
turing efficiencies coming out of Asia.
Though our margins held up well, our
selling, general & administrative and
advertising ratios were out of line, as
we incurred costs in anticipation of
reaching the higher volume. In
1999, we will manage our SG&A
and advertising ratios back to their
1997 levels, which were at historical
highs. Then we will cut costs even
further after we complete our merger
with The Learning Company and
realign the Mattel business in keeping
with our long-term strategic vision.
Now I’d like to talk about our brands, and
how we plan to expand them across multiple
platforms as we work to become even more rele-
vant in the lives of kids and their families.
Our $2 billion-plus girls category now includes the brands
of Barbie and American Girl, which together make Mattel
the world’s premier consumer products company for girls.
Barbie ended the year with $1.7 billion in worldwide sales,
and she has entered her 40th anniversary year ready to
Millennium Bride is a leading product in 4
the 1999 Barbie collector line.