Mattel Posts Higher Revenue Despite Toys ‘R’ Us Liquidation

US toymaker Mattel Inc.’s earnings results turned out mixed, as it presented better-than-expected revenue as well as higher quarterly loss in the first quarter.

In the quarter ended March 31, Mattel posted revenue of $708.4 million, falling by 3.7 percent from $735.6 million in 2017, though it still exceeded analysts’ estimates of $694.4 million.

The company’s net loss grew to $311.3 million or $0.90 per share, which was higher than its loss of $113.2 million or 33 cents a share during the same period last year. Adjusted for one-time items, net loss was $0.60 per share, beating analysts’ forecast of $0.39 a share.

Mattel said that this quarter's results are what it sees as the start of a great momentum.

The strong figures came after the California-based group announced last week the departure of chief executive Margaret Georgiadis. Mattel board director Ynon Kreiz is set to fill in the position.  

Shares of Mattel were up by 8.5 percent to $15.18.

Barbie Strengthens Overall Revenue

Mattel’s revenue surge was mainly driven by its flagship Barbie dolls, which saw sales, grew to a record of $152.7 million, adding 24 percent year over year worldwide.

That marks as the brand’s second straight gain and its best quarter since at least 2009, when its numbers started to improve.

The firm’s other major products, including Hot Wheels, also presented revenue increase of 15 percent to $144.9 million.

Barbie’s strength helped bolster combined sales of Hot Wheels, Fisher-Price, and Thomas & Friends by 2 percent during the quarter as well.

Mattel chief financial officer Joe Euteneuer stated that they are off to a strong start and that getting a sales growth of 2 percent, excluding Toys “R” Us, was a big deal, given where they were last year.

Toys “R” Us Impact Offset by Barbie Sales

Barbie’s record growth also eased the impact of American toy retailer Toy “R” Us Inc., who has announced the shuttering of its operations in the US and UK.

Mattel has had a tough year after the world’s largest toy-store chain’s Chapter 11 bankruptcy protection filing and liquidation weighed on its sales in the first quarter.

The company stated that its net sales in North America were down by 4 percent to $30 million, as Toy “R” Us liquidated, though the drop was somewhat offset by robust sales of Barbie and Hot Wheels. The two brands, according to Mattel, contributed to a 5 percent gross sales rise overseas.

The bankruptcy and liquidation of Toys “R” Us has become one of the biggest losses of the retail shake-up amid the rise of e-commerce.

Kreiz said while Toys ‘R’ Us will present a near-term challenge, their transformation plan remains as their main priority, as they work to deliver better profitability, and restore Mattel’s leadership position as a high-performing toy business.

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