Mattel Inc reported second quarter 2018 financial results, posting a 14 per cent fall in its second quarter sales revenue.
“Mattel is a company with great potential. We see a lot of opportunities, but there has been a big discrepancy between our financial performance over the last few years and where the company should be,” said Ynon Kreiz, Chairman, and CEO of Mattel.
For the second quarter of 2018, net sales were down 14% as reported and in constant currency, versus the prior year’s second quarter. Gross sales were down 11% as reported and in constant currency, reflecting a 10% impact from the Toys “R” Us liquidation. Reported operating loss was USD 189.2 million, and adjusted operating loss was USD141.3 million. Reported loss per share was USD 0.70 and adjusted loss per share was USD 0.56.
The company had a challenging second quarter driven primarily by the Toys “R” Us liquidation, that will now see the firm axe 22 per cent of its non-manufacturing jobs and sell its manufacturing sites in Mexico.
Conversely, Mattel’s Barbie and Hot Wheels brands saw continued growth with the doll line increasing 12 per cent and Hot Wheels proceeding 21 per cent.
“Our goal is to transform Mattel into an IP-driven, high performing toy company and I’m confident we have the right team, the right assets, and the right strategy in place to achieve this and enhance long-term value for our shareholders,” Kreiz further stated.
The job cuts, which began this week and will total more than 2,200 are a part of the USD 650 million cost-cutting plan announced last year. The reductions are focused on back-office and support positions, according to CEO Ynon Kreiz, who replaced Margo Georgiadis in April.
Revenue from the company’s partner brands, which includes sales from toys based on movie franchises, fell 32 percent from the year-ago quarter. The company saw weaker sales of its Cars toys, which was partially offset by sales of toys tied to Jurassic World.