Mattel Inc.'s Fisher-Price unit is recalling nearly 1 million Chinese-made toys because of concerns they may contain hazardous levels of lead paint, the third recall of toys made in China in recent weeks. The recall by the world's largest toy maker highlights recent concerns about the safety of imports from China, ranging from toys and food to toothpaste, and further raising concern among the public about U.S. reliance on China for a wide range of goods.
Mattel's recall involves 967,000 toy units featuring licensed characters including Elmo, Big Bird and Dora the Explorer made between April 19 and July 6 and sold in U.S. stores since May, the Consumer Product Safety Commission said in a statement Thursday.
For Mattel, the recall will mean a $30 million reduction in its Mattel's pre-tax operating profit, the world's largest toymaker said in a regulatory filing. The costs will be recorded in the second quarter, El Segundo Calif.-based Mattel said. The company also said it's conducting a "thorough investigation" into the matter, including a review of procedures regarding all of its products made in China. The commission said the toys were made with paints that may contain excessive levels of lead, which could cause "adverse health effects" if consumed. Wedbush Morgan analyst Sean McGowan maintained his buy rating on the shares and said he doesn't expect the issue to have a long-term impact on investors' view of Mattel. "Mattel ships literally hundreds of millions of individual items, so a recall of one million units is hardly material to total sales," McGowan wrote in a note to clients. "But consumer perception is extremely important and Mattel takes safety issues very seriously ... the company will treat this matter with the highest degree of urgency and will not try to find the cheapest solution." |
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