Mattel announced first-quarter earnings at a loss of 60 cents per share, which is 21 cents wider than the Wall Street consensus estimate of a loss of 39 cents per share.
Sales for the toymaker’s 60-year-old Barbie brand increased by 24% to USD 152.7 million in Q1 2018, despite Mattel’s overall worldwide net sales decreasing by 4% to USD 708.4 million in the period.
The company’s worldwide gross sales declined by 2% to US$800 million. However, excluding the impact of the Toys “R” Us liquidation, Mattel’s adjusted worldwide gross sales increased by 2%.
Global quarterly gross sales for Mattel Power Brands rose by 2% to USD 552.9 million. Hot Wheels saw gross sales of USD 144.9 million, marking an increase of 15% driven primarily by higher sales of die cast, tracks and playsets.
Gross sales for Fisher-Price and Thomas & Friends fell by 8% to USD 187.8 million. The American Girl segment also saw declines (down 21%) for Q1 2018 with gross sales of USD 67.4 million.
Worldwide gross sales of USD 247.2 million were clocked for Mattel Toy Box brands, down 10% compared to 2017. Mattel’s Toy Box brands include owned properties (down 6% to USD 130.7 million due to lower sales for Monster High and MEGA) as well as partner brands (down 14% to USD 116.5 million due to lower sales of vehicles and DC Super Hero Girls).
“Our first quarter results reflect continued progress on executing our transformation plan. We are also tightly managing our working capital, and making disciplined investments in our business,” said Joseph Euteneuer, CFO of Mattel.
Net sales in Mattel’s North America segment decreased by 5% to USD 326.2 million compared to the same period last year. Gross sales in the segment fell by 4% to USD 348.4 million, largely driven by sales. Excluding the USD 27-million gross sales reversal, adjusted Q1 2018 gross sales in North America saw a 4% increase.
Overall gross sales in the company’s International segment increased by 5% (driven primarily by Barbie and Hot Wheels) to USD 384.1 million. Europe saw gains in both net sales (up 4% to USD 136.7 million) and gross sales (up 8% to USD 168.3 million). Latin America, meanwhile, boasted net sales of USD 63.4 million (an increase of 6% compared to Q1 2017) and gross sales of USD 74.5 million (a 7% rise). Global Emerging Markets, however, saw net sales decline by 2% to USD 117.2 million, while gross sales remained relatively stable at USD 141.3 million (an increase of 1%).
The toymaker’s operating loss for the first quarter was USD 276.6 million, compared to USD 125.6 million last year. Adjusted operating loss for Q1 2018 was USD 160.5 million.
“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,” said Ynon Kreiz, incoming CEO of Mattel. ”
Earlier, the Board of Directors had named Ynon Kreiz, a Mattel director since June 2017, as Chief Executive Officer effective from April 26, 2018. Margo Georgiadis, who became Mattel’s CEO in February 2017, informed the Board of her decision to step down from her executive and Board roles to pursue a new opportunity. Ms. Georgiadis will serve in an advisory role at Mattel until May 10, 2018 to ensure a smooth transition.