Company News

Toy maker Mattel's holiday sales miss Wall St forecasts

Feb 1 (Reuters) - Mattel Inc’s sales fell short of Wall Street forecasts in the crucial holiday quarter, as the toy maker faced weak demand for key brands including Fisher-Price and as the effect of the collapse of Toys “R” Us lingered.

Mattel’s net revenue fell 12.1 percent to $1.61 billion in the fourth quarter ended Dec. 31, missing analysts’ average estimate of $1.69 billion, according to Thomson Reuters I/B/E/S.

Mattel reported a net loss of $281.3 million or 82 cents per share, hurt by a one-time, $457-million charge related to new U.S. tax laws. In the year-earlier quarter, Mattel had a profit of $173.8 million or 50 cents per share.

Excluding one-time items, Mattel reported a fourth-quarter loss of 72 cents per share.

Sales in the company’s construction, arts and crafts unit that includes Lego competitor Mega Blocks sank 25 percent, while sales from Fisher-Price toys dipped 12 percent.

El Segundo, California-based Mattel has faced weak demand in recent years for its most well-known products including Hot Wheels and Barbie as children increasingly prefer videogames and electronics over traditional toys. The company’s stock fell about 44 percent last year.

The September bankruptcy of major toy retailer Toys “R” Us, while highlighting the struggles facing the industry, heaped more pressure on Mattel and other toy makers to find new channels for sales.

Barbie made a comeback as sales from the iconic brand rose 9 percent.

Efforts to revitalize the line of dolls, including changes to skin tones and adding plus-sized and hijab-wearing models appeared to be paying off.

“We have taken aggressive action to enter 2018 with a clean slate so that we can reset our economic model and rapidly improve profitability,” Margo Georgiadis, who took over as Mattel CEO last February, said in a statement. (Reporting by Vibhuti Sharma and Karina Dsouza in Bengaluru; Editing by Sai Sachin Ravikumar)