Mattel, Inc. Q1 Earnings Miss Badly As Obsolete Inventory Weighs

Mattel, Inc. (MAT) late Thursday posted much worse than expected first quarter earnings results, as its unsold inventory continued to hamper results.

Written by StockNews.com

The El Segundo, CA-based toymaker reported:

a Q1 loss of ($0.32), which was $0.15 worse than the Wall Street consensus estimate of ($0.17).

Revenues fell 15.4% from last year to $735.6 million, compared with analysts’ view for $797.6 million.

Gross margin for the quarter also fell 680 basis points, hurt by obsolescence expenses, currency effects, and lower licensing volume.

Margo Georgiadis, CEO of Mattel,. commented via press release:

“Our Q1 results were below our expectations due to the retail inventory overhang coming out of the holiday period, but we remain encouraged by strong performance at retail for our key core brands, including Barbie, Hot Wheels and Fisher-Price as well as sustained momentum in high-growth markets like China.

We are confident we have worked through the majority of this overhang and look forward to a strong launch of Disney’s Cars 3 theatrical release in the second quarter.

While we have a lot of work to do to successfully position Mattel for the future, we see a clear runway to improving growth and profitability over time.”

Mattel, Inc. shares fell $1.39 (-5.51%) in after-hours trading Thursday. Year-to-date, MAT had already declined -7.13% prior to today’s report, versus a +5.74% rise in the benchmark S&P 500 index during the same period.

MAT currently has a StockNews.com POWR Rating of C (Neutral), and is ranked #6 of 9 stocks in the Entertainment – Toys & Video Games category.