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Company: Mattel (MAT)
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50%
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4 votes

  High oil prices negatively impacting margins

High petroleum prices are likely to hurt Mattel's margins in the near future. The company depends on petroleum based plastic resin as well as transportation. Because of rising costs of commodities like resin, Mattel's manufacturing costs increased drastically in 2007 and 2008. As a result of these higher costs, Mattel's Q3 2008 net profit increased only 1% on the tails of a 6% increase in sales.

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0%
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0 votes

  Facing hot competition with Wal-Mart Target

The change in retail landscape means that Mattel will have to deal with powerful discount retailers such as Wal-Mart (WMT) and Target (TGT). This, combined with strict inventory control enforced by these retailers are eating away Mattel's margins.

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0 votes

  Products in the toy industry have much shorter life-cycle than before

Products in the toy industry have much shorter life-cycle than before. The industry, as a whole, faces threats from growth in video games.

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33%
agree
3 votes

  Recalled Toys and Chinese Manufacturing

Recalled toys jeopardize Mattel's sales. In 2007, Mattel recalled over 18.6 million toys after they were discovered to contain small amounts of led based paints. Manufactured in China, Mattel now must take more precautions to make sure that this PR debacle and loss of sales does not occur again.

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