LeapFrog posts second quarter loss

Unsold inventory and the delayed release of its new LeapTV video game system contributed to a 43% drop in sales, compared to Q2 2013, for the electronic toy maker.
November 5, 2014

Unsold inventory and delayed product launches, combined with soft retail sales, led to a sinking second quarter for Emeryville, California-based electronic toy maker LeapFrog Enterprises.

Following a disappointing first quarter, the company’s consolidated net sales for the period ending September 30 were US$113.6 million, down by 43% from the same period last year. Additionally, its US net sales dropped by 47% while international net sales decreased by 33%.

According to LeapFrog CEO John Barbour, inventory carry-over from the 2013 holiday period and later launches of its major new products negatively impacted Q2 results.

The release of its new video game system LeapTV got pushed into the third quarter, a significant factor in the failure of Q2 net sales to meet expectations.The company added that its retail partners ran tighter inventories this year, and lower retail sales in key product categories also contributed to the decline.

Despite these challenges, along with the release of LeapTV, LeapFrog is looking to new product launches in games, books, videos and tablets to boost sales this holiday season.


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