First Quarter Highlights
- Worldwide net sales down 2 percent;
- Domestic gross sales down 11 percent and international gross sales up 8 percent;
- Worldwide gross sales for core brands: Barbie® flat; Hot Wheels® up 2 percent; Core Fisher-Price® down 1 percent and American Girl® brands up 10 percent;
- Gross margin decreased 130 basis points of net sales; SG&A increased 480 basis points of net sales;
- Operating loss of $36.5 million compared to operating income of $20.6 million in the first quarter of 2007; and
- Loss per share of $0.13 vs. prior year earnings per share of $0.03.

EL SEGUNDO, Calif., April 21, 2008 -- Mattel, Inc. today reported 2008 first quarter financial results. For the quarter, the company reported a net loss of $46.6 million, or $0.13 per share, compared to last year's first quarter net income of $12.0 million, or $0.03 per share.

"Results were not completely surprising compared to last year's strong first quarter, which benefited from depleted retail inventories and hot properties such as T.M.X.™ Elmo and CARS," said Robert A. Eckert, chairman and chief executive officer of Mattel. "Our consumer takeaway, though, outperformed shipments, which is a positive sign for the remainder of the year. We are also excited about the introduction of toy lines based on this summer's most anticipated theatrical releases, including Speed Racer, Kung Fu Panda™, Batman®: The Dark Knight™, and the American Girl® movie: Kit Kittredge®, An American Girl®. Although the first quarter was impacted by higher product costs and legal fees, we expect price increases effective in June to aid profitability in the latter half of the year."

Financial Overview

For the quarter, net sales were $919.3 million, down 2 percent compared to $940.3 million last year, including favorable changes in currency exchange rates of 5 percentage points. On a regional basis, first quarter gross sales decreased 11 percent in the U.S. and increased 8 percent in international markets, including favorable changes in currency exchange rates of 11 percentage points. Operating loss for the quarter was $36.5 million, compared to prior year's operating income for the quarter of $20.6 million.

The company's debt-to-total-capital ratio was 28 percent. Consistent with the seasonality of the business, during the quarter the company's cash and equivalents declined by approximately $276 million, compared with a decline of approximately $221 million in last year's first quarter.

Sales by Business Unit

Mattel Girls and Boys Brands

For the first quarter, worldwide gross sales for the Mattel Girls & Boys Brands business unit were $592.8 million, up 5 percent versus a year ago. Worldwide gross sales for the Barbie® brand were flat, with increases in international markets offsetting declines in the U.S. Worldwide gross sales for Other Girls Brands were up 16 percent, driven by High School Musical dolls. Worldwide gross sales for the Wheels category, which includes the Hot Wheels®, Matchbox® and Tyco® R/C brands, were up 15 percent, led by sales of the new Speed Racer toy line. Worldwide gross sales for the Entertainment business, which includes Radica® and Games and Puzzles, were down 5 percent for the quarter.

Fisher-Price Brands

First quarter worldwide gross sales for the Fisher-Price Brands business unit, which includes the Fisher-Price® Core, Fisher-Price® Friends and Power Wheels® brands, were $341.3 million, or down 13 percent versus the prior year, primarily due to declines in Fisher-Price® Friends.

American Girl Brands

First quarter gross sales for the American Girl Brands business unit, which offers American Girl® branded products directly to consumers, were $69.1 million, up 10 percent versus last year, driven by sales in the Atlanta and Dallas boutiques which opened in the second half of 2007.

About Mattel

Mattel, Inc., (NYSE: MAT; http://www.mattel.com) is the worldwide leader in the design, manufacture and marketing of toys and family products. The Mattel family is comprised of such best-selling brands as Barbie®, the most popular fashion doll ever introduced, Hot Wheels®, Matchbox®, American Girl®, Radica® and Tyco® R/C, as well as Fisher-Price® brands, including Little People®, Power Wheels® and a wide array of entertainment-inspired toy lines. Mattel is recognized as one of 2008's "100 Best Companies to Work For" by FORTUNE Magazine and among the 100 Most Trustworthy U.S. Companies by Forbes Magazine. Committed to ethical manufacturing and sustainable business practices, Mattel marked a 10-year milestone in 2007 for its Global Manufacturing Principles. With worldwide headquarters in El Segundo, Calif., Mattel employs more than 30,000 people in 43 countries and territories and sells products in more than 150 nations. Mattel's vision is to be the world's premier toy brands -- today and tomorrow.