Mattel 2011 Annual Report Download - page 46

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Fisher-Price Brands US segment income decreased 4% to $222.0 million in 2010 from $231.9 million in
2009, driven primarily by lower gross margins, partially offset by lower other selling and administrative
expenses.
American Girl Brands gross sales were $486.6 million in 2010, up $23.7 million or 5%, as compared to
$462.9 million in 2009, driven primarily by sales of Lanie®, the 2010 Girl of the Year®doll, and Felicity®dolls,
the benefit of two new American Girl®stores in Lone Tree, Colorado and Overland Park, Kansas, and the launch
of the American Girl®virtual world. Cost of sales increased by 5% in 2010, as compared to a 6% increase in net
sales, primarily due to higher freight and logistics expenses. Gross margins increased slightly by 30 basis points.
American Girl Brands segment operating income increased 9% to $112.9 million in 2010 from $103.4
million in 2009, driven primarily by higher net sales and higher gross margins, partially offset by higher
advertising and promotion expenses and higher other selling and administrative expenses.
International Segment
The following table provides a summary of percentage changes in gross sales within the International
segment in 2010 versus 2009:
Non-US Regions:
% Change in
Gross Sales
Impact of Change in
Currency Rates
(in % pts)
Total International ................................................. 6 –4
Europe ...................................................... 5 –4
Latin America ................................................ 1 –8
Asia Pacific .................................................. 23 7
Other ....................................................... 15 6
International gross sales were $2.92 billion in 2010, up $162.5 million or 6%, as compared to $2.76 billion
in 2009, with unfavorable changes in currency exchange rates of 4 percentage points. Gross sales of Mattel
Girls & Boys Brands increased 8%, with unfavorable change in currency exchange rates of 4 percentage points.
Gross sales of Barbie®increased 2%, with unfavorable changes in currency exchange rates of 5 percentage
points. Gross sales of Other Girls Brands increased 8%, with unfavorable changes in currency exchange rates of
4 percentage points, driven primarily by increased sales of Disney Princess®products and the launch of Monster
High®. Gross sales of Wheels remained flat in 2010, as compared to 2009, with unfavorable changes in currency
exchange rates of 2 percentage points, driven primarily by increased sales of Hot Wheels®products, partially
offset by decreased sales of Tyco R/C®products and other Wheels products that did not continue into 2010.
Gross Sales of Hot Wheels®products increased 6%, with unfavorable changes in currency exchange rates of 2
percentage points. Gross sales of Entertainment products increased by 22%, with unfavorable changes in
currency exchange rates of 7 percentage points, driven primarily by increased sales of Toy Story®3 and WWE®
Wrestling products. Fisher-Price Brands gross sales increased 1%, with unfavorable changes in currency
exchange rates of 4 percentage points. Gross sales of Core Fisher-Price®products decreased 3%, with
unfavorable change in currency exchange rates of 3 percentage points and gross sales of Fisher-Price®Friends
products increased 17%, with unfavorable changes in currency exchange rates of 6 percentage points, driven
primarily by sales of products supporting the Thomas and Friends®property and the launch of Sing-a-ma-jigs®,
partially offset by decreased sales of Sesame Street®and certain smaller licensed properties products. Cost of
sales increased by 2% in 2010, as compared to a 6% increase in net sales, primarily due to higher royalty
expenses as a result of increased sales of products tied to licensed properties. Gross margins increased primarily
due to price increases, partially offset by higher royalty expenses.
International segment income increased 26% to $531.0 million in 2010 from $422.5 million in 2009, driven
primarily by higher net sales and higher gross margins, partially offset by higher advertising and promotion
expenses.
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