Image: Barbie
Mark Lennihan  /  AP
"I want Barbie to grow every quarter, but we didn't do that in the U.S. this quarter," Mattel Chairman and Chief Executive Robert A. Eckert said during a conference call with Wall Street analysts.
updated 4/16/2007 7:18:56 PM ET 2007-04-16T23:18:56

These days, Barbie's getting most of her love outside the U.S.

Domestic sales of the classic fashion doll plunged 21 percent in the first quarter, Mattel Inc. said Monday in its earnings report.

The drop followed four consecutive quarters in which Mattel saw U.S. demand increase for its flagship brand.

Outside the U.S., Barbie's popularity kept surging, offsetting the domestic decline and translating into 2 percent growth in worldwide sales for the brand in the most recent quarter, Mattel said.

"I want Barbie to grow every quarter, but we didn't do that in the U.S. this quarter," Mattel Chairman and Chief Executive Robert A. Eckert said during a conference call with Wall Street analysts.

"While disappointed with shipments in the U.S., we're encouraged by our international growth," he said.

The world's largest toy maker, based in El Segundo, reported lower first-quarter profit but beat Wall Street revenue expectations with strong sales, despite the lackluster domestic demand for Barbie.

Profit slipped 60 percent from the year-ago period, which benefited from a hefty $57 million foreign tax settlement.

Mattel said earnings fell to $12 million, or 3 cents per share, from $30.2 million, or 8 cents per share, during the same period of 2006.

Analysts surveyed by Thomson Financial were expecting a loss of 5 cents per share.

Revenue, meanwhile, climbed 19 percent to $940.3 million, including a 3 percent benefit from currency exchange rates, compared with $793.3 million in the year-ago period.

Domestic sales rose 10 percent, while international sales jumped 29 percent, the company said.

Consensus estimates put sales at $847.8 million.

Overall, the company's performance was off to a good start this year, Eckert told analysts.

"Our portfolio of brands maintained the momentum from the holiday season, with strong performances from both Fisher-Price core and Fisher-Price Friends," he said.

The company made strides in stabilizing its Barbie business in 2006 after failed efforts in previous years to invigorate the brand. But this year's fantasy theme for the doll line, dubbed "Fairytopia," wasn't as strong as products rolled out in 2006, Eckert said.

"That's the big driver of our decline," he said.

Eckert said a decline in retail shelf space this spring was one factor in domestic Barbie sales.

"I don't think that was, in my opinion, the big driver of our decline, but it clearly worked against us," he said. "Certainly when we go into this fall, when it really counts, we're working hard to make sure that's not the case."

Sales of Disney Princesses and Poly Pocket! toys helped offset declines in the Winx and Pixel Chix toys, but worldwide gross sales in Mattel's Other Girls category fell 8 percent overall, the company said.

Its Wheels unit posted a 15 percent increase in worldwide gross sales, driven by growth in the Hot Wheels and Matchbox toy lines.

Demand for toys from the Disney/Pixar animated film "Cars" led Mattel's entertainment-related toy business, which posted a sales increase of 59 percent, including a 4 percent benefit from currency rates.

Gross sales of Fisher-Price products, which include the popular T.M.X. Elmo doll, rose 27 percent worldwide, including a 2 percent benefit from currency rates, the company said.

Sales of American Girl-branded toys increased 2 percent.

Shares of Mattel fell 24 cents to close at $28.10 in trading on the New York Stock Exchange.

Copyright 2007 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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