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Barbie maker Mattel reports shock loss as demand of top brands wanes

Mattel took a US$457mln hit related to the new US tax laws in the quarter
Mattel has snubbed takeover bids from rival Hasbro

Barbie dolls maker Mattel Inc (NASDAQ:MAT) posted a shock loss for the fourth quarter as revenues fell on weak demand for its top brands.

The toy company reported a net loss of US$281.mln in the quarter ended December 31, including a US$457mln hit related to the new US tax laws.

Excluding one-time items, the loss was 72 cents per share, compared to analysts’ expectations of 17 cents per share.

Revenue dropped 12.1% to US$1.61bn, missing forecasts of US$1.69bn.

Sales from Fisher-Price toys declined 12% and sales in the construction, arts and crafts division that includes Mega Blocks slumped 25%.

The company has in recent years struggled with sluggish sales of its well-known brands, including Barbie and Hot Wheels, as more children opt for video games and electronics over traditional toys.

The bankruptcy of toy retailer Toys ‘R’ US also added pressure on Mattel to find new outlets for sales.

Mattel’s gross margin fell to 32% from 47% a year ago, as advertising rose 18%.

The company, which has turned down takeover bids from rival Hasbro Inc (NASDAQ:HAS), decided to scrap its dividend payout to free up cash.

Shares in Mattel fell 8% to US$15.3 each in US pre-market trade. 

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Mattel Timeline

January 26 2017
February 02 2016

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