Mattel points to Toys R Us woes and underperforming brands as Q3 sales slump

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For Q3 2017, Mattel’s net sales were $1.56 billion, down 13 per cent on Q3 2016.

Net sales in the North American Region decreased by 22 per cent, a result Mattel attributes ‘Toys R Us filing for bankruptcy and tighter retailer inventory management’. In the International Region, net sales increased by one percent.

Worldwide gross sales for Mattel Girls & Boys Brands were $967.0 million, down nine per cent, while worldwide gross sales for the Barbie brand were down six per cent as reported. Worldwide gross sales for Other Girls brands were down 40 per cent, driven by declines in Monster High and DC Super Hero Girls.

American Girl gross sales were $88.0 million, down 30 per cent, while worldwide gross sales for Construction and Arts & Crafts Brands were $84.6 million, down 29 per cent.

“Our Q3 performance was clearly disappointing, led by compression in North America driven by Toys R Us filing for bankruptcy, tighter retailer inventory management and challenges with certain underperforming brands,” said Margo Georgiadis, CEO of Mattel.

“Despite these challenges, we are making strong progress against our transformation plan, which we believe will deliver step change revenue growth and profitability. To accelerate progress toward these goals, with our new leadership team in place, we are taking bold steps to simplify our business and right size our cost structure in alignment with our strategy. This will enable us to move faster to realise our most attractive opportunities as well as to unlock significant resources to invest in our transformation.

“We are optimistic about the future of Mattel and our ability to reposition the company to drive enhanced returns for shareholders.”

Elsewhere, worldwide gross sales for the Wheels category were down four per cent as reported, driven by declines in Tyco RC vehicles. Worldwide gross sales for the Entertainment business were up one per cent, boosted by increases in Cars sales, offset by declines in Minecraft and WWE Wrestling.

For the third quarter, worldwide gross sales for Fisher-Price Brands were $561.6 million, down 15 per cent due to declines in Thomas & Friends and infant products.

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