WowWee’s seasonality Clause Samples

WowWee’s seasonality. As mentioned previously, WowWee’s sales are essentially made in the third and fourth quarters. In the toy business, seasonality factors cause operating results to fluctuate significantly from quarter to quarter. Operating results may fluctuate as a result of factors such as the timing of new products, the advertising activities of competitors, delivery schedules set by customers and the emergence of new market entrants. These seasonal purchasing patterns and requisite production lead times cause risk in business associated with the underproduction of popular toys and the overproduction of toys that do not match consumer demand. Retailers also attempted to manage their inventories more tightly in recent years, requiring WowWee to ship products closer to the time the retailers expect to sell the products to consumers. In anticipation of retail sales in the traditional holiday season, WowWee significantly increases production in advance of the peak selling period, resulting in a build-up of inventory levels over the first three quarters, and a corresponding peak in accounts receivable, which results in seasonal working capital financing requirements.