Company reduces the effect of Toys R Us’ demise with the Barbie brand’s best growth on record.
When excluding $30m of sales lost in the liquidation of Toys R Us, Mattel’s latest results show that revenue rose 2%, fueled by the toymaker’s biggest brand. Barbie sales surged 24%, marking the second straight gain after a rough stretch and the best quarter since at least 2009, when Mattel started releasing its figures.
“We’re off to a strong start,” Joe Euteneuer, chief financial officer, said in an interview. “Getting to sales growth of 2%, excluding Toys R Us, is a big deal, given where we were last year.”
Barbie’s strength helped Mattel’s biggest properties – which also include Hot Wheels, Fisher-Price and Thomas & Friends – grow a combined 2% during a quarter when the world’s largest toy-store chain announced the shuttering of operations in the US and UK.
Shares rose as much as 5.5% at 4:09 pm after the close of regular trading in New York.
“Barbie and Hot Wheels are just flying off the shelves,” Joe said. “We’re spending more time trying to figure out how to manufacture more.”
Revenue of $708.4m beat analyst estimates in the first quarter, despite a 4% decline from the previous year. Analysts had projected sales of $689.8m.
The company’s adjusted loss was 60 cents a share, excluding some items mostly tied Toys R Us. Analysts had projected a loss of 40 cents. Mattel also reported bad debt expense tied to the retailer of $57.3m.
Ynon Kreiz, who became the new CEO of Mattel yesterday after Margo Georgiadis stepped down last week, said in a statement: “While Toys R Us will present a near-term challenge, our transformation plan remains our focus. We continue to see strong momentum in our key power brands.”
Mattel took the biggest hit from Toys R Us in North America, where sales fell 5%.