Mattel 2004 Annual Report Download - page 29

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Sales
Net sales for 2004 were $5.10 billion, a 3% increase compared to $4.96 billion in 2003, including a benefit
from changes in currency exchange rates of 2 percentage points. Gross sales within the US remained flat with
2003 and accounted for 58% of consolidated gross sales in 2004 compared to 60% in 2003. In 2004, gross sales
in international markets increased 7% compared to 2003, including a benefit from changes in currency exchange
rates of 5 percentage points.
During the fourth quarter of 2003, Mattel changed the way certain close out sales are classified in its
consolidated statement of income. Close out sales are sales of certain products that are no longer included in
current product lines. These sales were previously classified as a reduction of cost of sales. Effective
October 1, 2003, close out sales are reported as net sales in Mattel’s consolidated statements of income. This
change in classification had no impact on gross profit, net income, net income per common share, balance sheets
or cash flows for any date or period presented. For the fourth quarter of 2003, close out sales, which were
included in reported net sales, were $19.2 million. In 2004, close out sales represented 80 basis points of sales
growth for the year, and had a negative impact on gross profit, as a percentage of net sales, of 40 basis points. For
the first three quarters of 2003, close out sales classified as a reduction of cost of sales were $38.1 million. See
Item 6 “Selected Financial Data” and Item 8 “Financial Statements and Supplementary Data—Notes 1, 11 and 12
to the Consolidated Financial Statements.”
Worldwide gross sales of Mattel Brands decreased 1% to $3.2 billion in 2004 compared to 2003, including a
3 percentage point benefit from changes in currency exchange rates. Domestic gross sales decreased 5% and
international gross sales increased 4%, including a 6 percentage point benefit from changes in currency exchange
rates. Worldwide gross sales of Barbie®decreased 8% from 2003, including a benefit from changes in currency
exchange rates of 3 percentage points. Domestic gross sales of Barbie®decreased 15% and international gross
sales of Barbie®decreased 3%, including a 5 percentage point benefit from changes in currency exchange rates.
Worldwide gross sales of Other Girls Brands decreased 10% from 2003, including a 3 percentage point benefit
from changes in currency exchange rates. Sales of new product introductions in Other Girls Brands were more
than offset by declining sales of discontinued product lines. Worldwide gross sales in the Wheels category
increased 3% compared to 2003, including a 3 percentage point benefit from changes in currency exchange rates.
Worldwide gross sales of the Hot Wheels®product line increased compared to 2003, driven by double digit
growth internationally resulting from new product introductions. Worldwide gross sales in the Entertainment
category increased 22% compared to 2003, including a 3 percentage point benefit from changes in currency
exchange rates, mainly attributable to strong sales of Scene It?™and the launch of Mattel’s personal video
player, JuiceBox™, and continued strength in male action entertainment properties such as Batman™,
Megaman™, and Yu-Gi-Oh!™.
Worldwide gross sales of Fisher-Price Brands increased 8% to $1.9 billion in 2004 compared to 2003,
including a 1 percentage point benefit from changes in currency exchange rates. Domestic gross sales increased
4%, while international sales grew 18%, including a 6 percentage point benefit from changes in currency
exchange rates. Worldwide gross sales of Core Fisher-Price®increased 9% compared to 2003, including a
2 percentage point benefit from changes in currency exchange rates. Sales growth in Core Fisher-Price®was
primarily related to sales growth in infant and preschool products and continued growth in the BabyGear™line.
Worldwide gross sales of Fisher-Price®Friends increased 19% compared to 2003, including a 2 percentage point
benefit from changes in currency exchange rates, driven by the expansion of learning-related products and strong
sales growth from new product introductions featuring Dora the Explorer™and Winnie the Pooh.
Gross sales of American Girl Brands increased 10% to $379.1 million in 2004 compared 2003, due
primarily to the success of the American Girl Place®retail store in New York City which opened in
November 2003, and increased sales of The American Girls Collection®dolls and accessories driven by the first
American Girl®live-action, made-for-TV movie, which aired in November 2004.
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