American toy maker Mattel on Wednesday reported a drop in profits compared to last year, due to lower sales including a decline in Barbie products in the second quarter.
Profits fell 59 percent compared to this time last year, to $27.2 million, on a 12 percent fall in revenues to $1.1 billion.
The first quarter had seen a net loss of $106 million, and analysts had expected a loss of $11 million this quarter.
Business was negatively hit by retailers trimming inventory levels and “some overall industry softness,” said Chief Financial Officer Anthony DiSilvestro.
“At this point, we believe the retail inventory correction is mostly behind us, and we look forward to meeting consumer demand for our product as we enter the second half of the year and all-important holiday season,” DiSilvestro said.
Mattel’s toy categories were mixed, with “Hot Wheels” and the overall vehicles category scoring increased gross billings compared with last year, while Fisher Price and the action figures/building sets/games categories fell.
Barbie had a six percent drop in worldwide gross billings to $282.7 million.
A coming ‘Barbie’ bump?
The star-studded “Barbie” film was released after the end of the second quarter, and the iconic doll is expected to be a cash-cow for Mattel in the coming period.
The movie, from director Greta Gerwig and staring Margot Robbie, raked in a stunning $155 million in its opening weekend in North America.
Mattel Chief Executive Ynon Kreiz said that the toymaker had entered into 165 product partnerships tied to the film.
“We launched a wide range of ‘Barbie’ movie-related toys and products,” Kreiz said. “Releases to date have sold out across major distribution channels and we will be expanding the range in the second half.”
“The Barbie movie is a showcase for the cultural resonance of our IP (intellectual property), our ability to attract and collaborate with top creative talent and the capabilities of our franchise management organization,” Kreiz added.
“This also speaks to the potential of Mattel Films and the significant progress of our strategy to capture the full value of our IP.”
Shares of Mattel edged up 0.1 percent, to $21.34, in after-hours trading.
