Mattel's Loss Widens on Sales Slump
July 20 2016 - 4:50PM
Dow Jones News
Mattel Inc.'s loss widened in the latest quarter as a sales
slump in some of its iconic brands carried into the June quarter,
although its Barbie brand showed signs of strength.
Still, its adjusted loss wasn't as bad as Wall Street had
expected and sales didn't decline as much as forecast.
The toy maker's results follow Hasbro Inc.'s report that sales
in it largest segment, boys' toys, dropped in the second quarter,
driven by a decline in Transformers and Jurassic World toys, which
the Rhode Island-based toy maker said would continue to weigh on
results this year. California-based Mattel has reported lower
profit and sales for the last two years.
Over all, Mattel reported a loss of $19.1 million, or 6 cents a
share, compared with a loss of $11.4 million, or 3 cents a share, a
year earlier. Excluding restructuring costs and other items, the
loss was 2 cents a share, compared with a year-earlier profit of a
penny a share.
Sales fell to $957.3 million, a 3% decline from the year earlier
or 1% when adjusted for currency conversions.
Analysts surveyed by Thomson Reuters had projected a loss of 5
cents a share on $936.6 million in sales.
Gross margin narrowed to 45.3% from 47.9% a year earlier.
Barbie, a centerpiece in the company's turnaround efforts,
reported a 23% increase in gross sales, compared with a 19% decline
a year earlier. It was the second quarter of higher sales for the
brand, after a roughly two-year slump, though the doll's comeback
had stalled in the first quarter. //two quarters, not
consecutive//
Its Other Girls brand, which includes fashion-doll franchise
Monster High and the Polly Pocket dolls line, continued to weigh on
results with a 60% sales drop in the latest period. Meanwhile,
gross sales of American Girl fell 19% in the latest period.
Fisher-Price reported a 3% increase in the latest quarter, while
Wheels—which includes the Hot Wheels and Matchbox brands and sells
replica toy vehicles and cars inspired by popular lines such as
Star Wars—reported a 1% sales increase.
On Tuesday, Mattel said it had won the license for the Jurassic
World franchise, which Hasbro Inc. had held since 1992, with toys
and other related products slated to go on sale in time for the
next film release.
Financial terms weren't disclosed, but the Jurassic World line
is expected to give Mattel a much-needed boost as it continues to
turn around operations and offset the loss to Hasbro of the license
to sell products based on Walt Disney Co.'s Princess characters.
The Disney licensing deal had brought Mattel about $455 million in
2015, or about 8% of annual sales.
Mattel shares, up 21% this year, were up 1.5% to $33.33 in
after-hours trading.
Write to Maria Armental at maria.armental@wsj.com
(END) Dow Jones Newswires
July 20, 2016 16:35 ET (20:35 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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