New York - Mattel rose in late trading after sales declines at two of its most troubled brands slowed and it posted a smaller first-quarter loss than analysts projected.
The world’s largest toymaker said on Thursday that its loss was 8 cents a share, excluding some items. That was better than analysts’ estimates for a loss of about 10 cents. Revenue fell 2.5 percent to $922.7 million, topping analysts’ $900.5 million average projection.
Mattel is undergoing a management shakeup under Chief Executive Officer Christopher Sinclair, who replaced Bryan Stockton on an interim basis in January and was made permanent earlier this month. Sinclair, a longtime board member, has first focused on reducing bureaucracy to improve product innovation.
The toymaker’s biggest problem brand, Barbie, showed signs that the worst of its sales declines may be over. The unit’s sales fell 14 percent, slower than the 16 percent drop they had last year. Sales at Fisher-Price slid 2.7 percent after a 13 percent plunge in 2014.
“It’s not a great quarter by any means, but it’s also not the disaster many were expecting,” said Sean McGowan, an analyst at Needham & Co. Mattel also didn’t cut its dividend, which some observers had expected, he said.
The stock rose 6.8 percent to $26.98 at 5.02pm in late trading in New York. The shares declined 18 percent this year through Thursday’s close, compared with an 2.2 percent advance for the Standard & Poor’s 500 Index.
Mattel continued to be hurt by the strength of the dollar. The company generates about half of its sales outside North America, and revenue from abroad is worth less when the dollar gains in value. Instead of falling, sales would have gained 5 percent if the effect of currency fluctuations was taken out, the company said.
Currency effects will reduce sales by as much as 6 percent and earnings per share by as much as 35 cents this year, executives said on a conference call.
Bloomberg