Mattel posts loss despite boost from Barbie 50th
NEW YORK (AP) -- Mattel surely wishes Barbie could turn 50 every year.
The iconic doll was everywhere during the first three months of the year — from a show at Fashion Week in New York to a flagship store in Shanghai — and the buzz from the anniversary helped Mattel's U.S. sales jump in the first quarter.
It was a bright spot for the company after the worst holiday season in decades, and helped mitigate an overall sales drop of 15% for the quarter. Barbie sales had been flagging for years, and the surprise helped send Mattel shares up 15%.
"That's the strongest number they've put up in a long time, at least seven years," said Needham & Co. analyst Sean McGowan. "There was a big anniversary, but even outside of that I think Barbie did well."
The rest of the picture wasn't as rosy for the largest U.S. toy maker. Sales fell across most product categories due to the stronger dollar and cautious orders from stores that are still feeling the sting from the holidays.
While not giving specifics about orders for this year's holiday season, chief executive Robert A. Eckert said retailers and toy makers across the industry are planning conservatively in terms of sales.
"We would rather chase demand this year if it shows up than get ahead of ourselves and build extra inventory across the supply chain," he said.
Mattel's biggest rival, Hasbro, reports results on Monday. Analysts will also want to hear from them about orders for their most important season.
Retailers have been cutting back on orders to clear inventory after seeing demand from consumers drop sharply last year. Stores had to deeply discount items in order to clear the overstock.
Eckert indicated, however, that the bulk of that problem might be over. Mattel's own inventory fell 9% during the quarter.
"As I'm talking to customers, I don't hear people talking about inventory today like they were talking about inventory in January," he said. "My sense is the heavy lifting is probably behind us."
So far this year, Mattel toy sales at retail are up in the low- to mid-single digit percentage range, he added.
