Mattel’s first-quarter loss widens as Barbie sales slip

Mattel Inc. on Wednesday reported a first-quarter loss that was larger than its loss a year ago as sales slipped for its iconic Barbie doll and some other toys.

The latest loss painted the struggle Mattel faces as the El Segundo-based company continues trying to turn around its business after years of declining sales.

Mattel said its loss widened to $73.0 million, or 21 cents a share, from $58.2 million, or 17 cents a share, a year earlier.

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Adjusted for restructuring costs and other items, Mattel’s latest loss was 13 cents a share. Analysts had forecast an adjusted loss of seven cents, according to FactSet Research Systems Inc.

Mattel’s first-quarter sales fell 6% to $869.4 million from $922.7 million. Adjusted for the impact of foreign-exchange rates, sales slipped 2% from a year ago.

“While we continue to manage the ongoing impact of foreign exchange, our performance is in line with expectations,” Mattel Chief Executive Christopher Sinclair said in a statement.

In the quarter, the Barbie line had a 3% decline in sales and was flat after foreign-exchange adjustments.

But the Fisher-Price brand reported a 3% sales gain, and Mattel’s “wheels” group — including Hot Wheels and Matchbox cars — had a 2% sales increase.

Under Sinclair, who took over as chief executive a year ago, Mattel had posted higher earnings and revenue in the fourth quarter of 2015 to snap a streak of eight straight quarters of revenue declines.

The company — which employs 31,000 people worldwide, including about 2,000 in El Segundo — has been aggressively trying to update its product lines.

In January, for instance, Mattel announced three new body types for Barbie — petite, curvy and tall — and seven new skin tones to better reflect the diversity of women.

Mattel this month also hired designer Jonathan Adler to help bring “a modern sensibility” to Fisher-Price and to “elevate its appeal with millennial parents.”

In response, Mattel’s stock has soared 70% since hitting a five-year low in early October, although part of that gain stemmed from unconfirmed rumors in February that Mattel might be weighing a merger with rival toymaker Hasbro Inc.

Mattel’s stock closed Wednesday at $33.04 a share, down 87 cents.

Another problem facing Mattel is that the company lost the doll licenses to Walt Disney Co.’s hit film “Frozen” and Princess properties, which analysts estimate brought in more than $400 million annually for Mattel. Hasbro won those licenses starting this year.

For more business news, follow James F. Peltz on Twitter: @PeltzLATimes

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