Earns-Mattel
At 50 years old, Barbie is still delivering for Mattel Inc. But the doll can’t do it all herself.
Although Barbie sales were up 18% in the U.S. during the first quarter of the year, the El Segundo toy maker on Friday reported a net loss of $51 million, or 14 cents a share, compared with a loss of $46.6 million, or 13 cents a share, in the year-earlier quarter.
Investors, however, weren’t going to let the second straight quarterly loss spoil Barbie’s birthday party; shares rose more than 15% to $15.01.
“While the reported results weren’t knock-your-socks-off fantastic, all of the positive check marks you want to see are there,” said Robert Carroll, an analyst at UBS. “Barbie performed well; other lower-priced toys did well.” And, Carroll said, customers were responding well to a Jan. 1 price increase by Mattel.
Analysts surveyed by Thomson Reuters had expected a loss of 13 cents a share.
Revenue in the January-March period fell 15% from last year, to $786 million from $919 million.
After a disastrous holiday season, retailers are still selling off excess inventory, Mattel Chairman and Chief Executive Robert A. Eckert said in a conference call Friday.
In response, the toy maker is also letting its inventory shrink rather than building more toys than it can sell right now, Eckert said. Mattel’s inventories fell 9% year over year, he said.
“We’d rather chase demand this year if it shows up than get ahead of ourselves and build extra inventory,” Eckert said.
Mattel saw growth in its Disney Princess and Little Mommy toy lines in the first quarter, but it wasn’t enough to offset declines in Polly Pocket and “High School Musical” toys.
Lower-priced toys are still the company’s bestsellers, and with consumers having less money to spend, name recognition will become invaluable for Mattel, Eckert said.
“Now the hard work begins, translating the passion and energy from the 50th [birthday] celebrations to sustainable worldwide performance for the brand,” Eckert said. “Barbie is the bestselling brand in the history of toys and I don’t see that changing.”
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