While a number of brands have seen a fall in sales, Barbie and Cars 3 products have performed well.
Shares of Mattel have declined 8.6% as sales during the holiday period failed to meet Wall Street expectations. The company reported lower-than-average demand for key brands, including Fisher-Price and American Girl, as well as residual effects from the collapse of Toys R Us.
Mattel reported a net loss of $281.3m, or 82 cents per share, impacted by a one off, $457m charge related to new US tax laws. In the year-earlier quarter, Mattel had a profit of $173.8m, or 50 cents per share.
Margo Georgiadis, CEO of Mattel, commented: “Our fourth-quarter performance reflects a tough quarter as part of what was a difficult and extraordinary year for Mattel. We faced multiple significant dislocations, driven by mixed brands performance and the [Toys R Us] bankruptcy. These contributed to significant top and bottom-line pressures.”
The September bankruptcy of Toys R Us has had an effect on Mattel, being its second-largest customer after Walmart, and accounting for between 15-20% of US sales.
In the last quarter, sales of American Girl branded merchandise fell 23%. According to Margo, a number of American Girl stores were not meeting company expectations. Mattel plans to invest in revitalising the brand’s “premium” appeal, and improving online and offline experiences.
Sales of construction toys and arts and crafts supplies, which includes Mega Bloks, fell 25%. Sales of Fisher-Price toys are down 12%, exacerbated by Toys R Us’ bankruptcy and online retail issues.
Mattel’s Wheels category, which includes Hot Wheels toys, saw sales fall 7% in the quarter. Margo states that the company hopes to leverage Hot Wheels’ 50th anniversary to boost sales in this segment.
The company’s Other Girls toys category, which includes Monster High and DC Super Hero Girls dolls, fell 35%.
However, Barbie has made a strong comeback with sales up 9%. Entertainment toys also fared well for the company, with sales jumping 21% on the back of Cars 3 merchandise. Mattel expects sales of Cars toys will continue to grow in 2018, especially in international markets.