LeapFrog has revealed the financial results for the first quarter of 2014 that ended March 31st, 2014.
First quarter 2014 net sales were $56.9 million, down 31 per cent compared to $82.9 million last year, and were not materially impacted by changes in currency exchange rates.
The firm states that net sales were impacted by the calendar shift of Easter, retail inventory levels at the beginning of the year, which were higher than a year ago, and a continued tough retail environment.
In the U.S. segment, net sales were $39.1 million, down 33 per cent compared to $58.1 million last year.
In the International segment, net sales were $17.7 million, down 29 per cent compared to $24.8 million last year, and included a 1 per cent negative impact from changes in currency exchange rates.
"Our first quarter performance was about as we expected given the calendar shift of Easter into quarter two, higher levels of retail carryover inventory from Holiday 2013 across the key categories we play in and a continued challenging retail environment in our major markets," said John Barbour, chief executive officer.
"With a tough start to the year and our major new product launches scheduled for the second half, we expect our sales to be significantly more back-end focused in 2014 than last year. Our line-up of major new product introductions will begin shipping in late summer and fall.
"LeapFrog has a great track record of identifying hot new categories and creating innovative, fun learning products for children that become best sellers.
"Just last week, we announced LeapBand, the first wearable activity tracker created for children that encourages active play and healthy habits while they nurture their own personalised virtual pet. LeapBand will hit store shelves this summer and is a great example of our strategy to diversify our business by creating unique play experiences that help children achieve their potential through pure learning fun.
"We will further diversify our product portfolio with the fall launch of the exciting new LeapTV platform, an innovative kids' active video game console system for younger children that gets their minds and bodies moving. We will support the launch with over 100 pieces of content by the end of the year.
"Additionally, we plan to extend our market leadership in children's tablets with a number of innovative new LeapPads, including our first tablet that's specifically designed to be merchandised in the consumer electronics section of stores, and lots more amazing children's educational content.
"We are very excited about the response our new platforms and products have received from our retail partners and other industry experts, and we look forward to revealing more information about them later in the year.
"Also in 2014, we are making significant long-term, strategic investments in creating more new platforms and content, international expansion, online communities and information technology systems. We believe these investments will start to positively impact our bottom line in 2015 and will position us well for long-term growth and continued leadership in educational entertainment."
For the full year 2014, LeapFrog expects net sales to be in a range of $554 million to $580 million compared to $554 million in 2013.