Mattel shares took a hit in extended trading on Thursday after the toymaker behind Barbie and American Girl said its losses widened and sales came in shy of forecasts.
Mattel shares fell 5.6 per cent to $23.80 in extended trading after the company said its net loss widened to $113.2m, or 33 cents a share, in the three months ended in March. That compared with $73m or 21 cents a share in the year-ago period. Adjusting for one-time items a loss of 32 cents was larger than the 18 cents analysts had forecast.
Mattel said net sales fell a steeper-than-expected 15 per cent to $735.6m, compared with Wall Street’s expectations of $790.5m. Sales in North America decreased 23 per cent from a year ago, and international sales fell 2 per cent.
Barbie sales had begun to recover last year as the company had introduced three new body types — tall, curvy and petite — in an attempt to broaden appeal. But Thursday’s results showed that demand for the Barbie brand had slipped again, with gross sales down 13 per cent compared to a year ago, their second consecutive quarter of decline.
Sales at Fisher-Price, Mattel Girls & Boys, which include the Barbie brand, and American Girl also declined in the first quarter.
“Our Q1 results were below our expectations due to the retail inventory overhang coming out of the holiday period, but we remain encouraged by strong performance at retail for our key core brands, including Barbie, Hot Wheels and Fisher-Price as well as sustained momentum in high-growth markets like China,” said Margo Georgiadis, Mattel’s chief executive.
She added that the company has worked through most of the overhang and is looking forward to the release of Disney’s Cars 3 in the second quarter.
Ms Georgiadis came to Mattel from Google earlier this year after the toymaker replaced its chief executive for the second time in two years. The move was seen by some as suggesting a growing focus on technology and connectivity at a time when toymakers face stiff competition from tablets, phones and other electronic devices.
Analysts noted that Mattel’s Aristotle smart baby monitor, which functions like Amazon’s Echo device, suggests that greater innovation and connectivity is a part of the toymaker’s strategy.
Mattel shares are down 8.5 per cent so far this year.