Mattel Inc.'s (MAT) loss widened in the first quarter as the toy maker recorded higher costs and a stronger dollar weakened sales.
Continue Reading Below
The parent of brands such as Barbie and Fisher-Price, Mattel has been trying to revamp business as sales slow amid criticism that its creative department has lost its luster, weighed down by layers of bureaucracy and a shift to pay for international expansion. International sales accounted for 46% of gross sales in 2014.
In January, the company fired its chief executive following dismal results during the holiday quarter when profit dropped 59% from the year-earlier period. Mattel initially described its chief executive's departure as a resignation.
Christopher A. Sinclair, who had served on Mattel's board since 1996, has taken over the company's helm. Mr. Sinclair, a former senior PepsiCo Inc. and Quality Food Centers Inc. executive who lacked managerial experience in the toy industry, said he intends to rework the company's design, marketing and retail approaches.
Lackluster sales of Mattel's Barbie line, which once generated around $1.8 billion in annual sales, have weighed on the company's results. Sales, down 16% in 2014, fell 14% in the most recent period. Other girls brands, meanwhile, fell 11%.
The entertainment category, which includes the Radica brand and games, fell 4% and the wheels category, which includes Matchbox and Hot Wheels, rose 1%.
Continue Reading Below
Overall, El Segundo, Calif.-based Mattel reported that world-wide gross sales for boys and girls brands fell nearly 8% to $605.2 million.
Fisher-Price, geared to toddlers and preschool-age children, posted a 3% drop in sales to $264 million.
And American Girl sales remained largely flat from the year-ago period in constant currency at $106.1 million.
Construction and arts & crafts brands, which includes the Mega Bloks and RoseArt brands, were $38.3 million in the latest period. Mattel bought Canada-based Mega Brands Inc. in April 2014, as it competes with Danish rival Lego A/S.
Overall, the company reported a loss of $58.2 million, or 17 cents a share, compared with a loss of $11.2 million, or three cents a share, a year earlier. Excluding acquisition costs and other items, the loss was eight cents, compared with a three-cent profit a year earlier.
Sales fell 2% to $922.7 million.
Analysts surveyed by Thomson Reuters had projected a loss of nine cents a share on sales of $901.3 million.
Gross margin narrowed to 48.8% from 50.9% a year earlier.
Shares rose 7% to $27.16 in recent after-hours trading on the better-than-projected results.
Through Thursday's close, the company's stock is down 33% over the past 12 months, making it one of the worst performers in the S&P 500.