DOW JONES NEWSWIRES
Mattel Inc.'s (MAT) first-quarter net loss widened as retailers
trimmed inventories and the impacts of a stronger dollar more than
offset a rise in U.S. sales of Barbie-branded toys.
Mattel and rival toy makers are coming off the worst holiday
shopping season in recent years, with mainstays such as Barbie and
even Hot Wheels cars with 99-cent price tags, seeing sales slump.
And international sales, relied on to offset plateauing U.S. sales,
also sagged.
The prior-year loss, caused by similar woes, was the first in
more than three years at Mattel, though it managed to post profits
for the rest of last year.
The company reported a net loss of $51 million, or 14 cents a
share, compared with a prior-year net loss of $46.6 million, or 13
cents a share.
Revenue decreased 15% to $785.6 million. The drop was 6%
domestically and 23% abroad, with 13 percentage points due to the
stronger dollar.
Analysts polled by Thomson Reuters most recently were looking
for a loss of 13 cents on revenue of $796 million.
Gross margin rose to 44% from 43.2% despite the sales drop.
Chairman and Chief Executive Robert A. Eckert said the results
met the company's expectations and that Mattel would continue to
manage costs to reflect lower demand.
Barbie products, which account for about one-fifth of total
sales, fell 5%, as a double-digit domestic increase was more than
offset by international declines, hurt by the stronger dollar.
Sales of other girls' brands slumped 27% on declines in Polly
Pocket and High School Musical doll lines.
Fisher Price sales were down 17%. In the Wheels category, which
includes Hot Wheels, Matchbox and Tyco R/C brands, sales fell 14%,
as the prior year was boosted by products tied to the "Speed Racer"
movie flop.
American Girl Brands, Mattel's high-end doll unit which had been
expanding, saw sales decrease 4% reflecting the later timing of
Easter.
Mattel is managing to conserve cash, citing protection of its
dividend as a priority in February. It slashed 2009 capital
spending plans by a quarter and plans to avoid acquisitions. Mattel
eliminated 3% of its global work force in November.
Shares closed at $13.03 on Thursday and didn't trade
premarket.
-By Tess Stynes, Dow Jones Newswires; 201-938-2473;
tess.stynes@dowjones.com