Mattel's Loss Widens on Sales Slump

Mattel Inc.'s loss widened in the latest quarter as a sales slump in some of its iconic brands carried into the June quarter, although its Barbie brand showed signs of strength.

Still, its adjusted loss wasn't as bad as Wall Street had expected and sales didn't decline as much as forecast.

The toy maker's results follow Hasbro Inc.'s report that sales in it largest segment, boys' toys, dropped in the second quarter, driven by a decline in Transformers and Jurassic World toys, which the Rhode Island-based toy maker said would continue to weigh on results this year. California-based Mattel has reported lower profit and sales for the last two years.

Over all, Mattel reported a loss of $19.1 million, or 6 cents a share, compared with a loss of $11.4 million, or 3 cents a share, a year earlier. Excluding restructuring costs and other items, the loss was 2 cents a share, compared with a year-earlier profit of a penny a share.

Sales fell to $957.3 million, a 3% decline from the year earlier or 1% when adjusted for currency conversions.

Analysts surveyed by Thomson Reuters had projected a loss of 5 cents a share on $936.6 million in sales.

Gross margin narrowed to 45.3% from 47.9% a year earlier.

Barbie, a centerpiece in the company's turnaround efforts, reported a 23% increase in gross sales, compared with a 19% decline a year earlier. It was the second quarter of higher sales for the brand, after a roughly two-year slump, though the doll's comeback had stalled in the first quarter. //two quarters, not consecutive//

Its Other Girls brand, which includes fashion-doll franchise Monster High and the Polly Pocket dolls line, continued to weigh on results with a 60% sales drop in the latest period. Meanwhile, gross sales of American Girl fell 19% in the latest period.

Fisher-Price reported a 3% increase in the latest quarter, while Wheels—which includes the Hot Wheels and Matchbox brands and sells replica toy vehicles and cars inspired by popular lines such as Star Wars—reported a 1% sales increase.

On Tuesday, Mattel said it had won the license for the Jurassic World franchise, which Hasbro Inc. had held since 1992, with toys and other related products slated to go on sale in time for the next film release.

Financial terms weren't disclosed, but the Jurassic World line is expected to give Mattel a much-needed boost as it continues to turn around operations and offset the loss to Hasbro of the license to sell products based on Walt Disney Co.'s Princess characters. The Disney licensing deal had brought Mattel about $455 million in 2015, or about 8% of annual sales.

Mattel shares, up 21% this year, were up 1.5% to $33.33 in after-hours trading.

Write to Maria Armental at [e-mail]

(END) Dow Jones Newswires

July 20, 2016 16:35 ET (20:35 GMT)

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