Mattel Earnings Call Nuggets: Retail Inventory and Barbie Update
Jaime Katz – Morningstar: I guess I have a couple of questions. First, can you talk a little bit about where you sell inventory is in the retail channel, were there any shortages this quarter with the closer matching to point of sale?
Bryan G. Stockton – CEO: Jaime, it’s Bryan. We feel pretty good about where we are at retail inventory. We’ve been working really hard with our retail partners globally to try to reduce inventories. Now that’s something that clearly they’re interested in doing. Obviously, we’re interested in doing it as well, as you’ve seen our own inventories decline in the fourth quarter and the first quarter. We were in a pretty good shape in terms of in stocks across the line and, frankly, very good shape on Monster High as compared to a year ago, where it was a little tight. So we like that a lot. But what we’ve been doing is really working hard on partnering with our retailers for forecasting and really determining when product needs to get in. So we’re really working hard to partner and get better information, more actionable information, so we can all sell more product with less inventory.
Jaime Katz – Morningstar: Then it looks like you guys refinanced that $350 million note with a $500 million note, and I know rates are cheap and – but, obviously, if you just kind of refinanced the $350 million, you would be paying less in interest expense than with the $500 million. Can you kind of go through your logic behind maybe why you didn’t just kind of replace the $350 million? Is there – did you just want more flexibility or are you looking kind of towards more acquisitions?
Kevin Farr – CFO: No. I think, again, I think what we do is we target to deliver year end cash of $800 million to up to $1 billion on our capital investment framework, and a key metric is targeting debt to total capital of about 35%. Our goal is to deliver single-A metrics, and we felt like this financing put us right where we needed to be with regard to the capital investment framework. Then we do have about $50 million more that we are – have maturing in November that we’ll be repaying. So it’s actually, when you look at the full year, our incremental financing is about $100 million, and part of the reason we did the $100 million too is it’s more efficient to finance two 10-years at $250 million than two 10-years at $250 million than two 10-years at $200 million.
James Hardiman – Longbow Research: Talk a little bit about Barbie in the context of overall Fashion Dolls. Obviously, Barbie was down 2%. It sounds like that’s all currency, but American Girls, up 32%. Monster High was up a ton. Disney Princesses sounds like it’s doing pretty good. Is there any way to quantify what Fashion Dolls did overall? I’m assuming it’s up. Then I guess, secondly, it’s pretty hard to imagine that there isn’t at least some cannibalization. It seems like you guys are doing a great job of minimizing that. Can you talk about sort of the strategy, how you guys think about really maximizing the sales of the individual brands and then also collectively?
Bryan G. Stockton – CEO: James, it’s Bryan. We spend a lot of time as a Company thinking about our portfolio of brands in countries and customers. When we think about our portfolio of brands, we’re very fortunate to have the number one, two and three brands of Fashion Dolls. So if you look at NPD data, it shows that the Fashion Doll category is up double digits. It’s one of the fastest-growing categories than it has been in the last couple of years, again, because a lot of the innovation that we’ve been bringing to Barbie and Monster High and Disney Princess. So we spend a lot of time trying to really think about the consumer side of this, the target reach of these brands, how we can differentiate that and differentiate it, not just from a marketing standpoint, but from a product standpoint as well. So it’s really managing a portfolio of brands just like someone might manage a portfolio of investments. Now regarding Barbie, we feel very good about Barbie results at the moment, as we did at the end of the fourth quarter. Again, in local currency, global shipments were flat, and we see continued growth of Barbie POS outside the U.S., so we think that’s a good thing, and we’re going to continue to invest in Barbie in the second half as I mentioned, more DVDs and more innovative products like the Barbie Dreamhouse with not one but two elevators this year and the Digital Dress and the Digital Makeover Mirror. So, a lot of innovation coming in the Barbie line. So, we work hard to manage each brand individually but it’s in the context of the portfolio and how we grow the overall portfolio to the benefit of all brands and you can imagine that’s important to an important partner like Disney to know that, we’re treating their brand exactly as if it were our own.
James Hardiman – Longbow Research: Just briefly here on the cost side of the P&L, O.E. 3.0, you basically offset the gross number, the $5 million number with incremental cost. How should I think about the net number for the year in the context of the $50 million gross number and is there any help you can give us in terms of timing? Obviously, the majority of the savings seem like they’re going to be over the next three quarters, but does that ramp up through the end of the year? Any help on that front would be great.
Kevin Farr – CFO: Yeah, I can give you, for the full year, I think we’re looking at gross savings of about $50 million, and when you look at the timing, it’s mostly going to back ended in the third and fourth quarter. So, I think from a flow perspective, I would plan it that way. With respect to the amount of investments we’re going to make, at this point, we’re not going to disclose that, but overall, we expect the investments to only partially offset that $50 million of savings.
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