UPDATE 2-Mattel cuts sales forecast after inventory overhang slams results
* Q1 loss biggest since 2002, misses estimates
* Q1 sales drop biggest since 2009, misses estimates
* Didn't expect prolonged leftover inventory impact-CEO
* Co cuts full-year sales growth forecast
* Mattel shares drop 6 pct, Hasbro down 2 pct
(Adds forecast, updates share prices)
By Sruthi RamakrishnanApril 20 (Reuters) - Mattel Inc <MAT.O> reported a far
bigger-than-expected quarterly loss and drop in sales on
Thursday, hurt by poor demand by retailers for key brands Barbie
and Fisher-Price and due to big discounts to move inventory left
after weak holiday sales.
The world's biggest toymaker also cut its full-year sales
growth forecast after the dismal first-quarter report, where it
posted its biggest loss since 2002 and steepest sales decline
Mattel's shares fell 6 percent to $23.70 after the bell.
Rival Hasbro Inc <HAS.O> fell nearly 2 percent.
Mattel had warned in January that weak holiday-quarter
sales, due to higher promotional activity amid weak demand, led
to excess inventory that would hurt revenue in the first
But the impact was much more than what Wall Street, and
Mattel, had anticipated.
"What we didn't expect was the prolonged impact from the
leftover retail inventory," Margo Georgiadis, who took over as
chief executive in February, told Reuters.
Mattel's sales dropped 15.4 percent in the quarter ended
March 31, to $735.6 million, well short of analysts' average
estimate of $801.4 million, according to Thomson Reuters
The company's net loss widened to $113.2 million from $73
million year-over-year. Excluding items, it lost 32 cents per
share, much more than the 17 cents analysts had expected.
Georgiadis said the inventory issue was essentially isolated
to North America and a few European markets, and that Mattel had
cleared most of the excess inventory.
Still, the company cut its full-year sales growth forecast
to a mid-single digit percentage range from a mid- to
high-single digits range.
KEY BRANDS STUMBLE
Mattel said sales in its girls and boys brands division,
which houses Barbie, dropped 16 percent in the first quarter.
The division accounted for about 60 percent of total sales.
Barbie sales declined 13 percent, while Fisher-Price sales
dropped 9 percent.
Georgiadis, who was previously Google'sAmericas president,
said she would focus on developing more tech-enabled toys and
connected products to launch in the next couple of years as well
as push on with expanding in Asia.
Mattel has been boosting its presence in China's fragmented
yet lucrative toy market through deals, including with Alibaba
Group Holding Ltd <BABA.N>. [nL3N1GC3C4]
Mattel's fortunes are in contrast with Hasbro, which has
benefited since it won a lucrative contract to make dolls based
on Disney princesses, including Frozen's Elsa, from Mattel in
2014. Hasbro is due to report on Monday.
(Reporting by Sruthi Ramakrishnan in Bengaluru; Editing by
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Keywords: MATTEL RESULTS/ (UPDATE 2)