By Maria Armental
Mattel Inc.'s sales declined less-than-expected in the first
quarter as the toy maker's North American segment logged modest
gains.
Shares rallied 6.1% to $26.80 after hours after declining 18% so
far this year through Thursday's close.
The company's flagship Barbie brand continued to struggle
overseas, however, and the Fisher-Price preschool division also
posted lower sales.
Mattel has been trying to revamp its 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.
Christopher Sinclair took over as Mattel's CEO early in the
quarter after the firing of Bryan Stockton, who was let go
following a dismal holiday season.
Mr. Sinclair, a former senior PepsiCo Inc. and Quality Food
Centers Inc. executive who lacked managerial experience in the toy
industry, said he intended to rework the company's design,
marketing and retail approaches.
North America sales in the latest period grew 8%, but the
international segment booked a 14% decline, dented by currency
impacts.
By brand, sales at the flagship Barbie line, which once
generated about $1.8 billion in annual sales, fell 14% to $146
million in the most recent period. The company said retail sales
for Barbie in the U.S. were strong, but international markets saw a
decline.
Fisher-Price, geared to toddlers and preschool-age children,
posted a 2.7% decrease in sales, and the wheels category, which
includes Matchbox and Hot Wheels, saw a 1.1% increase. American
Girl sales were flat at about $106 million.
In all, the company reported a loss of $58.2 million, or 17
cents a share, widening from a year-earlier loss of $11.2 million,
or three cents a share. Excluding acquisition costs and other
items, the loss was eight cents, compared with a three-cent profit
a year earlier.
Sales fell 2.5% to $922.7 million but rose 5% in constant
currency.
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.
Write to Maria Armental at maria.armental@wsj.com
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