Mattel Inc.’s third-quarter earnings fell 33% as the toy maker booked its eighth straight quarter of falling sales, including another big drop for its iconic Barbie doll. Revenue fell 11 per cent to US$1.79 billion (RM7.357 billion), missing analysts’ US$1.89 billion average projection.
Brand-wise, sales for Mattel Girls & Boys brands declined 15 percent to $1.12 billion with Barbie sales down 4 percent in constant currency. The stock, however, dropped $0.55 or 2.44% in the after-hours trade. Excluding changes in currency exchange rates, the decline would have been 4 per cent. The company, which replaced Chief Executive Officer Bryan Stockton with board member Christopher Sinclair earlier this year, also will lose the licenses for Disney Princess and Frozen to rival Hasbro Inc. next year, leaving huge holes in its lineup.
Third- quarter sales for American Girl brands, which offers American Girl-branded products directly to consumers, slipped 3 percent to $109.9 million. Adjusted earnings per share came in at US$0.71 compared to prior year adjusted earnings of US$0.98.
A strong US dollar has hurt the overseas results of the company and the effects during the recently ended three month period were far worse that had been expected.
Sinclair added that the company remains “comfortable” with its full-year outlook. Mattel expects the impact to fade this quarter. Mattel has curtailed expenditures beyond expectations so far, this year and now plans to cut back costs by $300 million by the end of fiscal year 2016.
“We’re where we had thought we would be, and making good progress”, said Mr. Sinclair during the conference call.
“Some parts are a little harder to get done, but on balance it’s pretty solid”. We have been aggressively developing plans to offset the Disney Princess revenue gap and we have confidence in the new team managing Monster High.
Mattel, which is in the middle of a turnaround plan, has struggled to revive the doll and is now pinning its hopes on a new advertising campaign which aims to reinforce Barbie’s positive image.
