EL SEGUNDO, Calif. – Toy maker Mattel says weak sales of Barbie and markdowns to clear out excess inventory left over from a sluggish holiday season led to an unexpected first-quarter loss.
Its shares fell 41 cents, or 1.08 percent, to $37.47 on Thursday.
Toy makers are facing a weak environment globally due to the uncertain economy and popularity of electronic gadgets. The first quarter is the seasonally smallest for toy makers, coming after the key holiday quarter which can account for up to 40 percent of revenue.
In addition, Mattel Inc. has been struggling with weakness in core brands like Barbie, which had a 14 percent drop in sales, and Fisher-Price, down 6 percent.
“Revenues were consistent with our expectations as we worked through inventories in a challenging global retail environment,” said CEO Bryan G. Stockton.
Results from East Aurora-based Fisher-Price, a Mattel division, were also down.
“First quarter sales weren’t where we want them to be, though not unexpected in this challenging global retail environment,” said Geoff Walker, executive vice president of the Fisher-Price, Global Brands Team. “We were faced with heavy inventories, but we made some significant progress to sell through.”
Worldwide gross sales of Fisher-Price were down 6 percent from last year, to $271.4 million. That decline was partially offset by gains in the company’s Power Wheels, Laugh and Learn, and baby gear product lines.
Particular bright spots were the Power Wheels Thomas & Friends ride-along train and the Sit-Me-Up Floor Seat for babies.
Fisher-Price said it is optimistic about its endeavors in the digital arena, as more children play digitally online using apps on smartphones and tablets. It said it has several new marketing initiatives poised to launch in the coming months, targeting the “massive new generation of millennial parents embarking on parenthood every day,” Walker said.
“Our digital engagement with consumers continues to deepen because we know moms will interact with our brand online more than any other medium,” Walker said. “We’re excited about our first-ever digital baby commercials with links to purchase that will launch later this month.”
Mattel, the largest U.S. toy maker, says its net loss for the three months ended March 31 totaled $11.2 million, or 3 cents per share. That compares with net income of $38.5 million, or 11 cents per share last year. Analysts expected earnings of 7 cents per share.
The company which makes Disney Princess dolls and Hot Wheels cars says revenue fell 5 percent to $946.2 million from $995.6 million. Analysts expected $947.6 million. Revenue fell 2 percent in North America and 7 percent internationally.
Separately the company declared a second-quarter dividend of 38 cents, payable on June 13 to shareholders of record on May 23.
Its shares dropped $1.81, or 4.8 percent, to $36.07 in pre-market trading about two hours before the market opening.
News Business Reporter Samantha Maziarz Christmann contributed to this report.