Mattel 2013 Annual Report Download - page 37

The following table provides a summary of Mattel’s consolidated gross sales by brand for 2013 and 2012:
For the Year
% Change2013 2012
(In millions, except percentage
information)
Mattel Girls & Boys Brands:
Barbie .......................................................... $1,202.8 $1,275.3 –6%
Other Girls ...................................................... 1,322.8 1,059.9 25%
Wheels ......................................................... 747.7 813.4 –8%
Entertainment .................................................... 1,042.6 1,038.0 —
4,315.9 4,186.6 3%
Fisher-Price Brands:
Core Fisher-Price ................................................. 1,374.9 1,505.8 –9%
Fisher-Price Friends ............................................... 608.6 571.7 6%
Other Fisher-Price ................................................. 137.2 174.8 –21%
2,120.7 2,252.3 –6%
American Girl Brands ............................................ 632.5 567.5 11%
Other .......................................................... 48.7 46.2
Total Gross Sales ............................................. $7,117.8 $7,052.6 1%
Gross sales were $7.12 billion in 2013, up $65.2 million or 1%, as compared to $7.05 billion in 2012, with
no impact from changes in currency exchange rates. The increase in gross sales was due to higher sales of Other
Girls products, partially offset by lower sales of Core Fisher-Price products. Of the 25% increase in Other Girls
gross sales, 20% was due to higher sales of Monster High products, and 5% was due to the initial launch of the
Ever After High product line. The 9% decrease in Core Fisher-Price gross sales reflected product innovation not
being strong enough to drive growth, along with lower effectiveness of in-store, commercial, and promotional
activities.
Cost of Sales
Cost of sales as a percentage of net sales was 46.4% in 2013, as compared to 46.9% in 2012. Cost of sales
was flat at $3.01 billion in 2013 and 2012, as compared to a 1% increase in net sales. Within cost of sales,
product and other costs decreased by $16.8 million, or 1%, from $2.44 billion in 2012 to $2.42 billion in 2013;
royalty expenses increased $6.7 million, or 3%, from $240.2 million in 2012 to $246.9 million in 2013; and
freight and logistics expenses increased by $4.4 million, or 1%, from $332.9 million in 2012 to $337.3 million in
2013.
Gross Profit
Gross profit as a percentage of net sales increased to 53.6% in 2013 from 53.1% in 2012. The increase in
gross profit as a percentage of net sales was primarily due to savings from Operational Excellence 3.0 programs,
favorable product mix, and price increases offset by higher input costs, partially offset by unfavorable changes in
foreign currency exchange rates.
Advertising and Promotion Expenses
Advertising and promotion expenses primarily consist of: (i) media costs, which primarily include the
media, planning, and buying fees for television, print, and online advertisements, (ii) non-media costs, which
primarily include commercial and website production, merchandising, and promotional costs, (iii) retail
advertising costs, which primarily include consumer direct catalogs, newspaper inserts, fliers, and mailers and
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