First quarter 2014 net sales were $56.9m, down 31% compared to $82.9m last year, and were not materially impacted by changes in currency exchange rates. The company faced a tough sales comparison from last year’s record first quarter sales performance, driven by high post-season demand for LeapPads in Spring 2013 following a strong Holiday 2012 performance when the company’s tablets held three of the top ten selling toy slots in the US, according to NPD, and were virtually a total sell-out around the world.
Net sales were also impacted by the calendar shift of Easter, retail inventory levels at the beginning of the year, which were higher than a year ago, and a continued tough retail environment. In the US segment, net sales were $39.1m, down 33% compared to $58.1m last year. In the International segment, net sales were $17.7m, down 29% compared to $24.8m last year, and included a 1% negative impact from changes in currency exchange rates.
“Our first quarter performance was about as we expected given the calendar shift of Easter into Quarter 2, higher levels of retail carryover inventory from Holiday 2013 across the key categories we play in and a continued challenging retail environment in our major markets,” said John Barbour, chief executive officer. “With a tough start to the year and our major new product launches scheduled for the second half, we expect our sales to be significantly more back-end focused in 2014 than last year. Our line-up of major new product introductions will begin shipping in late Summer and Autumn.
Mr Barbour added: “LeapFrog has a great track record of identifying hot new categories and creating innovative, fun learning products for children that become best sellers. Just last week, we announced LeapBand, the first wearable activity tracker created for children that encourages active play and healthy habits while they nurture their own personalised virtual pet. LeapBand will hit store shelves this Summer and is a great example of our strategy to diversify our business by creating unique play experiences that help children achieve their potential through pure learning fun.”
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