In the trailing four quarters, Mattel (MAT) has missed estimates in three quarters and beaten its estimates in one quarter. The persistent weakness in Mattel’s American Girl, Fisher-Price, Thomas & Friends, and Toy Box–owned and partner brands contributed to the slowdown in the company’s top-line growth.
In the second quarter, Mattel’s sales were down 14.0%. Apart from the Toys “R” Us dissolution, a tougher year-over-year comparison regarding Cars sales and its soft China business subdued its growth. The overall gross sales of its American Girl dolls declined 33.0%.
In the near term, the company expects to be negatively impacted by the Toys “R” Us bankruptcy and soft business trends in China. Also, an unfavorable foreign exchange movement is expected to subdue its growth.
Barbie business is strong
Although Barbie is one of Mattel’s top brands, this business has had its fair share of headwinds. However, Barbie sales have been improving as the company is witnessing success after it refreshed Barbie’s image. A focus on female empowerment and celebrating different body types and skin colors benefited the company’s Barbie sales.
In the second quarter, Barbie’s gross sales were up 12.0%. Its international Barbie sales were impressive, with 20.0% year-over-year growth.
Other growth endeavors
Mattel is focused on stepping up its marketing efforts for its other brands, including Hot Wheels, Fisher-Price, and American Girl. The company is confident that the debut of Thomas & Friends on Nickelodeon in March, followed by the new content launch in September, should aid its top-line growth.
During its second-quarter conference call on July 25, Mattel CEO Ynon Kreiz stated that the company is looking to use the strength of its extensive intellectual property. These efforts include TV and movie releases, as well as franchise management that includes content distribution, consumer products, gaming, and live events. As part of this strategy, the company recently launched its movie studio, Mattel Films.