LONDON/WASHINGTON: The financial crisis has caused consumers to cut their discretionary spending across most major categories, and while the toy market has proved slightly more immune than some other sectors, manufacturers have still come under pressure to adapt to changing conditions.
Mattel, the world's biggest toy maker, saw its worldwide net sales fall by 15% in the first quarter of this year, including a 6% decrease in the US, and a slide of 23% outside of its home market.
In Europe, revenues plunged by 26% on a reported basis from January to March, with sales also sliding by 21% in Latin America, and by 15% in Asia Pacific.
Overall, the company posted an operating loss of $55.2m (€70.5m; £61.6m) in Q1, with shipments of its Barbie brand declining by 5%, Hot Wheels down by 3%, Core Fisher-Price by 17%, and American Girl by 4%.
Chairman/ceo Bob Eckert said these figures "were as expected as we continue to weather the economic storm," and that Mattel had "work to do in international markets and with other key properties."
Its advertising expenditure also fell by $84.1m from $103m over this period compared with the previous year, and Eckert stated an intention to continue to cut costs over the course of this year.
Hasbro reported net earnings of $19.7m in the first quarter of 2009, measured against a total of $37.5m in Q1 2008, with revenues slipping from $704.2m to $621.3m, a fall of 6% in constant terms.
Sales in the US and Canada dropped from $428.5m to $404.5m, while international revenues shrunk from $248.3m to $189.2m over the same period, all of which amounted to an operating loss of $14.5m.
In response, Brian Goldner, its president/ceo, committed to "making smart and tough decisions around investments and spending, working with our retailers, and positioning Hasbro not only for 2009 but for the years to come."
The company's adspend contracted by $14.7m, to $62.3, in the first quarter, but Goldner expressed optimism that products tied to films such as Transformers: Revenge of the Fallen and X-Men Origins: Wolverine would boost sales going forward.
The Walt Disney Company also registered a 7% reduction in its total revenues, to $8.0bn, in the last quarter, while operating income stood at $1.5bn.
Within this, sales through its consumer products arm actually increased by 9%, to $496m, and are up by some 14% over the last six months as a whole.
While its media network similarly enjoyed an expansion of 2% in revenue terms, its parks and resorts, studio entertainment and interactive media units all posted double-digit drop offs.
Robert Iger, the company's president/ceo, said Disney had been through a "difficult" period due to "the weak economy and other factors," but expressed the belief that "our creativity, brands and businesses will serve us well as the economy recovers."
NAMCO Bandai, the Japanese conglomerate, announced that its revenues reached $4.4bn for the year ending in March, down 7.4% on an annual basis, with profits also off by 11% to £1.5bn.
Sales across its toys and hobbies division also diminished by 8% year-on-year, to $1.7bn in all.
Revenues levels proved most stable in Europe, down by just 3%, compared with negative growth of 8% in each of Japan, the Americas and Asia.
Overall, it appears that the world's biggest toy manufacturers have avoided the worst affects of the downturn in most established markets, thus far at least, and remain optimist
Data sourced from company reports; additional content by WARC staff