US toy maker Mattel reported 15 per cent y-o-y (year-on-year) slide in its revenue on a constant currency basis for the quarter ended 31 March 2017 (Q1-17, current quarter). The slide would have been even steeper but for the growth in revenues contributed by the third world – the Asia Pacific specifically with 17 per cent and Latin America with four per cent as reported growths (as against 18 per cent and two per cent respectively on a constant currency basis). The third region that contributes to Mattel’s International Gross Sales – Europe – had a decline of 10 per cent as reported and a decline of seven per cent on constant currency basis.
The North American region that includes the US and Canada and Disney’s product line of American Girl reported 24 per cent decline in y-o-y sales. The North American region contributed $448 million (about 60 per cent) to Disney’s $735.6 million in Q1-17. That the toy major is hurt by the loss of Disney Princess line to competitor Hasbro would be an understatement, and today even a cliché.
“Our Q1 results were below our expectations due to the retail inventory overhang coming out of the holiday period, but we remain encouraged by strong performance at retail for our key core brands, including Barbie, Hot Wheels and Fisher-Price as well as sustained momentum in high-growth markets like China,” said Mattel CEO Margo Georgiadis. “We are confident we have worked through the majority of this overhang and look forward to a strong launch of Disney’s Cars 3 theatrical in the second quarter. While we have a lot of work to do to successfully position Mattel for the future, we see a clear runway to improving growth and profitability over time,” she added on an optimistic note.
In Q1-17, Mattel reported revenue of $735.6 million as compared to $869.4 million in the corresponding year ago quarter Q1-16. The company reported a higher net loss of $113.2 million in the current quarter as compared to a loss of $73 million in Q1-16. The Mattel board declared a 2017 second quarter cash dividend of $0.38 per share, which is flat compared to the second quarter of 2016.
Sales by brand
For Q1-17, worldwide gross sales for Mattel girls and boys brands were $441.1 million, down 16 per cent as reported and in constant currency, versus the prior year’s first quarter. Worldwide gross sales for the Barbie brand were down 13 per cent as reported, and down 12 per cent in constant currency, versus the prior year’s first quarter. Worldwide gross sales for other girls brands were down 34 per cent as reported and in constant currency, versus the prior year’s first quarter. Worldwide gross sales for the wheels category were up four percent as reported and in constant currency, versus the prior year’s first quarter. Worldwide gross sales for the entertainment business were down 27 per cent as reported and in constant currency, versus the prior year’s first quarter.
Gross sales for Mattel girls and boys brands in the international region were $238.4 million, down by two per cent as reported and down by one per cent in constant currency, versus the prior year’s first quarter. Gross sales in the North American region were $202.7 million, down by 29 per cent as reported and in constant currency, versus the prior year’s first quarter.
Fisher-Price brands
For Q1-17, worldwide gross sales for Fisher-Price brands, which includes the Fisher-Price core, Fisher-Price Friends and Power Wheels, were $246.9 million, down nine per cent as reported, and down eight per cent in constant currency, versus the prior year’s first quarter.
Gross sales for their brands in the international region were $113.8 million, up one per cent as reported and up four per cent in constant currency, versus the prior year’s first quarter. Gross sales in the North American region were $133.1 million, down 17 per cent as reported and in constant currency, versus the prior year’s first quarter.
American Girl brands
For the first quarter, worldwide gross sales for American Girl brands, which offers its products directly to consumers, were $82.2 million, down 12 per cent as reported and in constant currency, versus the prior year’s first quarter.
Construction and Arts and Craft brands
For the first quarter, worldwide gross sales for construction and arts and craft brands, which includes the MEGA BLOKS and RoseArt brands were $38.5 million, down 38 per cent as reported and in constant currency, versus the prior year’s first quarter.