Mattel reports Q1 loss

Net sales down two per cent as higher product prices and legal fees take their toll; price increases on their way.
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Mattel has posted a net loss of $46.6 million for its first quarter, compared with last year’s Q1 net income of $12 million.

Overall, net sales were valued at $919.3 million, down two per cent on last year’s efforts. US gross sales dropped 11 per cent, while international sales increased by eight per cent.

Barbie sales worldwide remained flat, with increases in international markets offsetting declines in the US. Other Girls’ Brands were up 16 per cent, driven by sales of High School Musical dolls.

Sales of the new Speed Racer toy line boosted worldwide sales in the Wheels category, which rose by 15 per cent and included Hot Wheels, Matchbox and Tyco.

The firm’s entertainment business saw a 5 per cent dip in sales of Radica and Games and Puzzles, while Fisher-Price brands also saw a decline of 13 per cent, attributed mainly to declines in Fisher-Price and Friends.

Bob Eckert, chairman and CEO, said: “Results were not completely surprising compared to last year’s strong first quarter, which benefited from depleted retail inventories and hot properties such as TMX Elmo and Cars.

“Our consumer takeaway, though, outperformed shipments, which is a positive sign for the remainder of the year. We are also excited about the introduction of toy lines based on this summer’s most anticipated theatrical releases, including Speed Racer, Kung Fu Panda, Batman: The Dark Knight and the American Girl movie: Kit Kittredge, An American Girl.

“Although the first quarter was impacted by higher product costs and legal fees, we expect price increases effective in June to aid profitability in the latter half of the year.”

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