Mattel shares dropped Thursday after the nation’s largest toy maker reported a wider loss and a 15% drop in sales for the first quarter as it dealt with holiday hangover of too many items unsold.
The latest quarterly performance underscores the challenges facing Chief Executive Margo Georgiadis, a former Google executive who came on board two months ago and has been charged with reinvigorating the company.
El Segundo-based Mattel, wrestling with changes in the toy business, has been working to turn around its core Barbie business and other franchises.
In a conference call with analysts, Georgiadis said the financial results were below the company’s own expectations and “unacceptable relative to what Mattel is capable of.” Georgiadis attributed the performance to “retail inventory overhang coming out of the holiday period … and the resulting slower pace of retail reorders.”
Mattel reported a loss of $113.2 million, or 33 cents a share, in the quarter that ended March 31. Adjusted for one-time costs, the loss came to 32 cents a share.
The results did not meet Wall Street expectations. The average estimate of five analysts surveyed by Zacks Investment Research was for a loss of 17 cents a share.
The company posted revenue of $735.6 million in the period, which also missed analyst forecasts. A year ago, the company had posted revenue of $869.4 million. For this year's first quarter, five analysts surveyed by Zacks expected revenue of $810.2 million.
Mattel’s stock fell more than 6%, or $1.60, to $23.61 in after-hours trading Thursday. In regular trading, the shares closed up 10 cents to $25.21. The shares have dropped slightly more than 8% since the beginning of the year, while the Standard & Poor’s 500 index has climbed 5%.
Georgiadis said in a statement that “we remain encouraged by [the] strong performance at retail for our key core brands, including Barbie, Hot Wheels and Fisher-Price, as well as sustained momentum in high-growth markets like China.”