Despite Barbie power, Mattel’s Q1 global sales fell 4%

The US toymaker reported worldwide net sales of US$708.4 million in the first quarter of 2018, with strong Barbie sales helping to offset the impact of the Toys "R" Us liquidation.
April 27, 2018

As Mattel embraces change with the arrival of new CEO Ynon Kreiz, the company’s traditional roots still seem to be firmly in place. Sales for the toymaker’s 60-year-old Barbie brand increased by 24% to US$152.7 million in Q1 2018, despite Mattel’s overall worldwide net sales decreasing by 4% to US$708.4 million in the period.

The company’s worldwide gross sales declined by 2% to US$800 million. However, excluding the impact of the Toys “R” Us liquidation, Mattel’s adjusted worldwide gross sales increased by 2%.

Global quarterly gross sales for Mattel Power Brands rose by 2% to US$552.9 million. Hot Wheels saw gross sales of US$144.9 million, marking an increase of 15% driven primarily by higher sales of die cast, tracks and playsets.

Gross sales for Fisher-Price and Thomas & Friends fell by 8% to US$187.8 million. The American Girl segment also saw declines (down 21%) for Q1 2018 with gross sales of US$67.4 million.

Worldwide gross sales of US$247.2 million were clocked for Mattel Toy Box brands, down 10% compared to 2017. Mattel’s Toy Box brands include owned properties (down 6% to US$130.7 million due to lower sales for Monster High and MEGA) as well as partner brands (down 14% to US$116.5 million due to lower sales of vehicles and DC Super Hero Girls).

Net sales in Mattel’s North America segment decreased by 5% to US$326.2 million compared to the same period last year. Gross sales in the segment fell by 4% to US$348.4 million, largely driven by sales reversals resulting from the TRU liquidation but partially offset by the strength of Barbie and Hot Wheels. Excluding the US$27-million gross sales reversal, adjusted Q1 2018 gross sales in North America saw a 4% increase.

Overall gross sales in the company’s International segment increased by 5% (driven primarily by Barbie and Hot Wheels) to US$384.1 million. Europe saw gains in both net sales (up 4% to US$136.7 million) and gross sales (up 8% to US$168.3 million). Latin America, meanwhile, boasted net sales of US$63.4 million (an increase of 6% compared to Q1 2017) and gross sales of US$74.5 million (a 7% rise). Global Emerging Markets, however, saw net sales decline by 2% to US$117.2 million, while gross sales remained relatively stable at US$141.3 million (an increase of 1%).

The toymaker’s operating loss for the first quarter was US$276.6 million, compared to US$125.6 million last year. Adjusted operating loss for Q1 2018 was US$160.5 million.

The mixed bag of quarterly results follows a difficult fiscal 2017 for Mattel, where global revenue fell by 11%. After just 14 months at the helm of Mattel, Margo Georgiadis stepped down as Mattel CEO last week, and former Maker Studios boss Kreiz took the reins at the toymaker yesterday.

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