Mattel reports sharp 61% drop in second quarter profit

Weak sales of its impossibly proportioned Barbie doll and other core brands contributed to a 61% plunge in second quarter net income for toy maker Mattel Inc.

The El Segundo company said worldwide sales for its classic Barbie dropped 15%, its Fisher-Price Brands fell 17%, and Hot Wheels slid down 2%. Its American Girl Brands, however, were up 6%.

Bryan Stockton, Mattel’s chief executive, acknowledged that the quarter did not meet expectations, but said the company had positioned itself well for the rest of the year.

“We completed the acquisition of the MEGA Brands, reduced inventories, strengthened our management team,” Stockton said in a statement.

Mattel spent about $423 million buying MEGA Brands, which include the Mega Bloks and RoseArt brands.

For the three months ended June 30, Mattel reported net income of $28.3 million, or 8 cents a share. That’s compared to a net income of $73.3 million, or 21 cents a share, in the same period a year earlier. Sales slid 9% to $1.1 billion.

In a Thursday analyst call, Stockton said Mattel plans to boost its advertising budget for its core brands in the months heading into the holiday season.

He also pointed to strong sales on products related to Disney’s blockbuster animated film “Frozen.” “We are continuing to chase demand here,” he said.

However, Stockton warned that the company will still experience headwinds in the third quarter.

Twitter: @ShanLi