In the first quarter of 2018, Mattel’s worldwide net sales decreased 4 percent, while global gross sales rose 2 percent, excluding the impact of the Toys”R”Us liquidation.
Reported operating loss in Q1 was $276.6 million and adjusted operating loss was $160.5 million. During the quarter, consumer takeaway for Barbie and Hot Wheels was up double digits, while Fisher-Price and Thomas & Friends were down mid-single digits. These results reflect an $87 million operating income impact from the Toys”R”Us liquidation, including a $30 million sales reversal.
In North America, net sales declined 5 percent and gross sales decreased 4 percent. Adjusted gross sales rose 4 percent, excluding a $27 million gross sales reversal. For the international segment, net sales increased 2 percent and gross sales were up 5 percent. Net sales for American Girl dropped by 21 percent, while gross sales for the brand were down 22 percent.
“Mattel delivered positive sales growth in the first quarter, excluding the impact of the Toys’R’Us liquidation,” said Ynon Kreiz, the new CEO of Mattel. “And we continue to see strong momentum in our key Power Brands, with Barbie and Hot Wheels each up double-digits. While Toys’R’Us will present a near-term challenge, our transformation plan remains our focus as we work to deliver improved profitability and return Mattel to its leadership position as a high-performing toy company.”
“Our first-quarter results reflect continued progress on executing our transformation plan,” added Joseph Euteneuer, the CFO of Mattel. “In addition, we are tightly managing our working capital and making disciplined investments in our business.”