Boston, MA 02/04/2014 (wallstreetpr) – Mattel, Inc. (NASDAQ:MAT)’s quarterly results throw out two trends which are very ominous if correct. It remains to be seen if these sustain over a longer period.
The Trends:
It is not only Mattel, Inc. (NASDAQ:MAT), some brick-and-mortar retail chains have also seen a decline in sales during the last quarter. The last quarter is very important for consumer companies as the crucial holiday season falls in this period. The shopping frenzy ensures that many companies are able to make good their losses during the complete year. This year threw up a worrying trend. It was expected that ecommerce retailers would have a good season and would increase their share of the market. But the extent to which traditional retailers would be hit was not anticipated. The weather also managed to play spoilsport for them. Mattel reported a decline of 10% in revenues in the fourth quarter in North America.
Usage Trends Also Changing?
Climatic conditions may force buyers towards the ecommerce platforms. Budgets may also be curtailed on account of less spending powers. But these affect everyone in the segment. Do the trends also point towards an overall decline in the toy market? Are mobile games to blame for this decline? These issues will need to be addressed by Mattel, Inc. (NASDAQ:MAT). Smartphones have been a game changer in the computing business. They have lead to changes in the memory segment as cloud based applications are now favored over the physically installed ones. There is also a decline in sales of PCs. Companies like Microsoft Corporation (NASDAQ:MSFT) are already feeling the heat. Others like chip maker Intel Corporation (NASDAQ:INTC) are also realigning their business processes.
A Stitch In Time:
Mattel, Inc. (NASDAQ:MAT) will need to study both the trends very carefully. History is littered with the names of companies who could not read the changing trends and did not realign themselves. Nokia Corporation (ADR) (NYSE:NOK) had such a big fall that it is yet to recover. Mattel would do well to look into the trends now. There is still time to change and realign itself.
