NEWS

Mattel’s quarterly sales miss estimates, says Toys R Us bankruptcy among factors

Published on: 26th July 2018

The company has announced that it will cut 2,200 jobs along with plans to sell factories in Mexico. 

Mattel’s quarterly sales missed Wall Street estimates yesterday (Wednesday 25th July), weighed down by the liquidation of key customer Toys R Us and the absence of a big movie tie-in in the quarter.

The company also said that it will cut 2,200 jobs, or 22% of its global non-manufacturing workforce, and plans to sell factories in Mexico, as part of a $650m cost-saving programme.

Mattel’s net sales fell 13.7% to $840.7m in the second quarter ended 30th June, short of the $851.8m analysts had expected, according to Thomson Reuters I/B/E/S. Worldwide gross sales increased by 2%, excluding the impact of the Toys R Us liquidation.

Revenue from the company’s partner brands, which includes sales from toys based on movie franchisees, fell 23% in the reported quarter. However, for the quarter, sales of Barbie and Hot Wheels were up double digits – 24% and 15% respectively – while Fisher-Price and Thomas & Friends were down mid-single digits.

The company, like the rest of the US toy industry, has been hit hard by the liquidation of retailer Toys R Us and said the closure of its biggest customer dented its gross sales by 10% in the second quarter.

Mattel’s newly appointed chief executive officer Ynon Kreiz commented: “Mattel delivered positive sales growth in the first quarter, excluding the impact of the Toys R Us liquidation. And we continue to see strong momentum in our key Power Brands, with Barbie and Hot Wheels each up double-digits. While Toys R Us will present a near term challenge, our transformation plan remains our focus, as we work to deliver improved profitability and return Mattel to its leadership position as a high-performing toy company.”

Net loss in the reported quarter widened to $240.9m, or 70 cents per share, from $56.1m, or 16 cents per share, a year earlier.

Mattel had a total of about 28,000 employees as of 31st December 2017.

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