Mattel now has to hope it still has time to repair its battered image with parents before Santa Claus begins to stuff stockings.

Mattel now has to hope it still has time to repair its battered image with parents before Santa Claus begins to stuff stockings.

6/25/2018 Mattel Gets the Lead Out

https://www.forbes.com/2007/08/14/mattel-china-recall-markets-equity-cx_jl_0814markets12.html#609eba0e1829 1/2

AUG 14, 2007 @ 11:30 AM

Mattel Gets the Lead Out

By Joshua Lipton

Mattel now has to hope it still has time to repair its battered image with parents before Santa Claus begins to stuff stockings.

The holiday shopping season is only a few months away but Mattel continues to make headlines for all the wrong reasons. The company announced the recall of millions of toys on Tuesday because the Chinese-made products contain small magnets that could be swallowed or contain impermissable levels of lead.

The U.S. Consumer Product Safety Commission reported the recall at a news conference in Washington D.C.

“The safety of children is our primary concern, and we are deeply apologetic to everyone affected,” said Mattel Chief Executive Officer Robert A. Eckert. “Mattel has rigorous procedures, and we will continue to be vigilant and unforgiving in enforcing quality and safety. We don’t want to have recalls, but we don’t hesitate to take quick and effective action to correct issues as soon as we’ve identified them to ensure the safety of our products and the safety of children.”

In morning trading on Tuesday, shares of Mattel quickly fell 3.4%, or 81 cents, to $22.76.

This latest bad news from the toymaker comes less than two weeks after Mattel recalled 1.5 million other Chinese-made toys coated with paint believed to contain dangerous levels of lead.

That recall covered 83 types of toys distributed in 32 countries, including figures of such popular characters as Big Bird, Elmo, Dora the Explorer and Diego. Mattel said it had stopped more than two-thirds of the 967,000 U.S. toys from reaching store shelves, but over 300,000 had already been bought by consumers from May through August. (See: “Chinese Toy Terror.”)

Despite the bad news, on July 16 Mattel reported that its second-quarter profits jumped 15.2% on strong international sales.

Mattel said net income rose to $43.1 million, or 11 cents a share, from $37.4 million, or 10 cents a share, in the comparable quarter a year ago. Sales also rose 6.5% to $1.02 billion. The results nearly matched the Street–analysts were expecting earnings of 11 cents a share and net sales of

6/25/2018 Mattel Gets the Lead Out

https://www.forbes.com/2007/08/14/mattel-china-recall-markets-equity-cx_jl_0814markets12.html#609eba0e1829 2/2

$1.03 billion. (See: “Mattel Rises On Global Appeal.”)

–The Associated Press contributed to this article.


Comments are closed.