Even with families staying home all day, toys were apparently not a winner this quarter. Mattel (MAT +0.16%), the U.S. toy manufacturer of beloved brands Barbie, Hot Wheels, Fisher-Price and more, saw a 14% decline in sales in the first quarter of 2020 that ended in March.
Falling along with most of retail
North American sales decreased 17%, with Barbie sales dropping 10% and Fisher-Price and Thomas & Friends decreasing 25%, but Hot Wheels gaining 5%. Uno and Pictionary offset losses in the games segment. Rival Hasbro (HAS 0.75%) saw a 30% increase in its larger games division when it posted earnings last week.
The company reported an operating loss of $150 million versus a loss of $127 million in 2019, and loss per share was $0.61 compared with $0.51 last year. Gross margin, however, improved 820 basis points to 43%.
Image source: Mattel.
Moving forward
Mattel had been getting back to speed with revamped operations in recent quarters after seeing declining sales, and the company is optimistic about the future despite the downturn. "Our work over the past two years to develop a flexible and results-oriented organization is serving us well during this time," said CEO Ynon Kreiz. "We remain focused on transforming Mattel into an IP-driven, high-performing toy company and creating long-term shareholder value."
Kreiz said on a conference call that sales in April were already up double digits in retail stores and triple digits in digital. Though Mattel pulled its previous 2020 outlook, the company remained positive about growth in the second half of 2020.
Mattel's share price has not recovered from a fall in March and remains down 36% for the year.
