By Maria Armental
Mattel Inc. reported a weaker sales decline in the first quarter
as an uptick in North America helped offset the impact of the
stronger dollar.
Shares, down 18% so far this year, rallied nearly 7% to $26.95
after hours.
However, the company's flagship Barbie brand, which once
generated about $1.8 billion in annual sales, continued to struggle
overseas; and the Fisher-Price preschool division also posted lower
sales.
Mattel, the largest toy maker by sales, has been trying to
revamp its business as sales slow amid criticism that its creative
department has lost its luster, weighed down by layers of
bureaucracy and a shift to pay for international expansion.
Christopher A. Sinclair took over as Mattel's chief executive
following the firing of Bryan Stockton, who was dismissed after a
dismal holiday season. Mattel initially described Mr. Stockton's
departure as a resignation.
Mr. Sinclair, a former senior PepsiCo Inc. and Quality Food
Centers Inc. executive who lacked managerial experience in the toy
industry, has said he intends to rework the company's design,
marketing and retail approaches.
North America sales in the latest period rose 8%, while the
international segment booked a 14% decline, hurt by the currency
exchange rates.
By brand, Barbie sales fell 14% to $146 million in the most
recent period. The company said retail sales for Barbie in the U.S.
were strong but fell abroad from the year-ago period.
Fisher-Price, geared to toddlers and preschool-age children,
posted a 3% decrease in sales, and the wheels category, which
includes Matchbox and Hot Wheels, saw a 1% increase. American Girl
sales were flat at about $106 million.
In all, the company reported a loss of $58.2 million, or 17
cents a share, widening from a year-earlier loss of $11.2 million,
or three cents a share. Excluding acquisition costs and other
items, the loss was eight cents, compared with a three-cent profit
a year earlier.
Net sales fell 2.5%, to $922.7 million, but rose 5% in constant
currency.
Analysts surveyed by Thomson Reuters had projected a loss of
nine cents a share on sales of $901.3 million.
Gross margin narrowed to 48.8% from 50.9% a year earlier, partly
due to last year's acquisition of Mega Brands Inc.
Write to Maria Armental at maria.armental@wsj.com
Corrections & Amplifications
Mattel Inc.'s first-quarter net sales fell 2%, to $922.7
million. An earlier version of this article incorrectly stated the
dollar amount. (April 16, 2015)
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