Barbie and Hot Wheels grow but Q1 revenue still drops as Mattel laments the ‘Toys R Us effect’

Sales of Barbie and Hot Wheels are on the rise, yet toymaker Mattel is still the latest to blame Toys R Us for its sliding first quarter sales figures.

Mattel has stated that the liquidation of the US toy retailer has presented a ‘near term challenge’ to the company that welcomed in its new chief executive this week.

Mattel has reported revenue of $708.4m for the first quarter of the year, down four per cent from $735.6m last year. The company also delivered a net loss of $311.3m, 43.9 per cent deeper than the $113.2m loss a year ago.

Despite the loss, results have beaten analysts’ expectations of a net loss of $145.8m, while Barbie and Hot Wheels segments both saw double-digit growth during the quarter.

Fisher-Price and Thomas & Friends lines registered declines in the mid-single digits.

The bankruptcy of Toys R Us has removed a key sales channel for Mattel, among other manufacturers who has already endured a tough past six months and weaker than expected performances over the Christmas trading season.

The manufacturer is also seeing out a reshuffle in management and executive ranks. Ynon Kreiz, a director at Mattel since June, took the reins as chief executive this week, replacing Margo Georgiadis who announced earlier this month she was stepping down.

Kreiz said in a statement on Thursday afternoon that, excluding the Toys R Us liquidation, Mattel delivered positive sales growth in the first quarter and sees “strong momentum” in key brands like Barbie.

“While Toys R Us will present a near term challenge, our transformation plan remains our focus, as we work to deliver improved profitability and return Mattel to its leadership position as a high-performing toy company,” he said.

Mattel last year reportedly rebuffed a takeover approach from Hasbro, and speculation about a tie-up has continued to swirl this year.