Mattel Is Doing Great but What’s Wrong with Fisher-Price?

I have recently been asked, “What’s wrong with Fisher-Price? Why are they off while the rest of Mattel’s business is booming? Is it competition? Are they losing market share?

A look at the Fisher-Price revenue numbers shows that the company has declined in sales from $1.914 billion in 2013 to $1.145 billion in 2019. They weren’t alone. Rival Playskool generated revenue of $322,000,000 in 2013 which had declined to $285,000,000 in 2019.

So, is it competition? Yes, there is, to some degree. Melissa & Doug has made inroads, as have some of the other preschool lines. There has also been competition from retail private label lines.

I don’t believe, however, that the major culprit is from competition. It is from a continuing decline in the U.S. birthrate. I have laid out below, Fisher-Price revenues from 2013 through 2019. Below is the birthrate for the same period of time.

As the birthrate has declined, so has Fisher-Price sales.

Fisher-Price Revenue Summary

2013    2014    2015    2016    2017   2018    2019

1,914   1,634   1,664   1,698   1,455   1,262   1,145

CDC Birth Rate Summary*

2013    2014    2015    2016    2017  2018    2019

 62.5     62.9     62.5     62.0     60.3     59.1     58.2    

*Birthrate is the number of live births per 1,000 women

According to the CDC, birthrates were down for all groups except for those over 40. Here is  how the CDC website puts it:

Birth rates declined for nearly all age groups of women under 35, but rose for women in their early 40s. The rate for women aged 35–39 was essentially unchanged in 2019…The birth rate for teenagers aged 15–19 declined by 5% in 2019; rates declined for both younger (aged 15–17) and older (aged 18–19) teenagers.

A declining birthrate is a heavy headwind to face. Fisher-Price has its work cut out for it, but the silver lining may be that it is those who have the most personal wealth, parents in their late 30’s and older, who are seeing birthrate increases. These are parents with the desire and, more importantly, the means to buy the very best for their children.

These older parents tend to live in large, metropolitan areas on the coasts (think New York, Atlanta, San Franciso and Los Angeles). As a result, they are easy to target. Fisher-Price may want to focus on these older parents. One way to approach the challenge is to provide them with higher-priced products combined with a targeted marketing campaign.

What do you think? How do we confront a continuing reduction in the number of children?

Leave a Reply