EL SEGUNDO, Calif. (AP) — Mattel Inc. said Monday that its first-quarter profit dropped 53 per cent, pulled down by costs tied to an acquisition and lower sales for Barbie and Hot Wheels, particularly in North America.The largest U.S. toy maker said timing related to shipping “Cars 2”-related toys last year, plus cautious retailer orders, caused North American revenue to slide 9 per cent.
Results were below expectations and shares fell more than 7 per cent in morning trading.
“We consider the first quarter to be spring training for the toy industry,” said CEO Bryan Stockton. “We continue to have momentum in many key areas and we’re focused on improving our performance in a couple of areas like North America and Fisher-Price.”
Mattel’s net income fell to $7.8 million, or 2 cents per share, for the three months ended March 31. That’s down from $16.6 million, or 5 cents per share, a year earlier.
Excluding costs related to the $680 million HIT Entertainment acquisition, adjusted earnings were 6 cents per share. That was a penny below what analysts surveyed by FactSet were expecting.
HIT Entertainment is the company behind Thomas the Tank Engine and Bob the Builder. Mattel announced the deal in October.
Revenue fell 3 per cent to $928.4 million from $951.9 million a year ago as the currency exchange rate dragged on the El Segundo, Calif., company. Analysts expected revenue of $986 million.
Mattel’s stock dropped $2.52, or 7.2 per cent, to $31.61 in morning trading. It shares have been trading near their high for the year of $34.62 reached in late March. Its shares traded as low as $22.70 in mid-August.
Worldwide gross sales for Barbie slipped 6 per cent in the quarter, while sales of other girls brands — which includes Monster High — rose 22 per cent. The Wheels segment — which includes Hot Wheels, Matchbox and Tyco R/C — reported a 6 per cent sales decline. Sales for the entertainment unit — which includes Radica and games — fell 17 per cent mostly because of declines in the Cars property. Fisher Price sales were essentially flat at $310.2 million, while sales of American Girl climbed 4 per cent on strong sales of the 2012 Girls of the Year, McKenna. The Fisher Price division makes pre-school toys such as Power Wheels
“As is often the case this time of year, we have work to do in certain areas across our portfolio of brands, countries and customers as we prepare to successfully execute the all-important holiday season,” CEO Bryan Stockton said in a statement.
Mattel Inc. declared a second-quarter dividend of 31 cents per share. The dividend will be paid on June 15 to shareholders of record on May 23.