Mattel 2008 Annual Report Download - page 36

The following table provides a summary of Mattel’s consolidated results for 2007 and 2006 (in millions,
except percentage and basis point information):
For the Year
2007 2006 Year/Year Change
Amount
% of Net
Sales Amount
% of Net
Sales %
Basis Points
of Net Sales
Net sales .................................. $5,970.1 100.0% $5,650.2 100.0% 6%
Gross profit ................................ $2,777.3 46.5% $2,611.8 46.2% 6% 30
Advertising and promotion expenses ............ 708.8 11.9 651.0 11.5 9% 40
Other selling and administrative expenses ........ 1,338.4 22.4 1,232.0 21.8 9% 60
Operating income ........................... 730.1 12.2 728.8 12.9 0% (70)
Interest expense ............................. 71.0 1.2 79.9 1.4 -11% (20)
Interest (income) ............................ (33.3) -0.6 (30.5) -0.5 9% (10)
Other non-operating (income), net .............. (11.0) (4.4)
Income before income taxes ................... $ 703.4 11.8% $ 683.8 12.1% 3% (30)
Sales
Net sales for 2007 were $5.97 billion, a 6% increase as compared to $5.65 billion in 2006, including a
3 percentage point benefit from changes in currency exchange rates. The 2007 Product Recalls reduced net sales
by approximately $48.9 million for sales returns and reserves recorded in 2007. Gross sales in international
markets increased 17% as compared to 2006, including a 7 percentage point benefit from changes in currency
exchange rates. Gross sales within the US decreased 1% from 2006, and accounted for 51% and 56% of
consolidated gross sales in 2007 and 2006, respectively.
Worldwide gross sales of Mattel Girls & Boys Brands increased 8% to $3.70 billion in 2007 as compared to
2006, including a 5 percentage point benefit from changes in currency exchange rates. Domestic gross sales of
Mattel Girls & Boys Brands decreased 4% and international gross sales of Mattel Girls & Boys Brands increased
18%, including an 8 percentage point benefit from changes in currency exchange rates. Worldwide gross sales of
Barbie®increased by 1%, including a 4 percentage point benefit from changes in currency exchange rates.
Domestic gross sales of Barbie®decreased by 15%, primarily driven by sales declines in Barbie®Fantasy and
My Scene®products, partially offset by sales increases in Barbie®Collector products. International gross sales of
Barbie®increased by 12%, including an 8 percentage point benefit from changes in currency exchange rates,
primarily due to higher sales of Barbie®Reality and Barbie®Collector products. Softness in Barbie®Fantasy
products worldwide was driven by the underperformance of toys associated with the 2007 Barbie®entertainment
properties, Barbie®Magic of the Rainbow™and Barbie as the Island Princess™as compared to the 2006
entertainment properties, Barbie®in Fairytopia™II: Mermaidia®and Barbie in the 12 Dancing Princesses®.
Worldwide gross sales of Other Girls Brands increased 2% from 2006, including a 5 percentage point benefit
from changes in currency exchange rates, primarily driven by strong sales of Little Mommy®and High School
Musical™, partially offset by sales declines of Winx Club®and Pixel Chix®worldwide, and Polly Pocket®in the
US.
Worldwide gross sales of Wheels products increased 14% as compared to 2006, including a 4 percentage
point benefit from changes in currency exchange rates, primarily as a result of strong worldwide sales growth in
Hot Wheels®and Matchbox®products. Worldwide gross sales of Entertainment products, which includes games
and puzzles and Radica®, increased by 16% as compared to 2006, including a 5 percentage point benefit from
changes in currency exchange rates, primarily driven by continued strong worldwide sales in CARS™products
and inclusion of Radica®sales, partially offset by sales declines in Superman®products.
Worldwide gross sales of Fisher-Price Brands increased 8% to $2.44 billion in 2007 as compared to 2006,
including a 2 percentage point benefit from changes in currency exchange rates. Worldwide gross sales of Core
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