(Reuters) – Mattel Inc (MAT.O) will have a new line of “Baby Yoda” toys ready to hit shelves in time for Christmas, the company said on Tuesday, as it looks to chart a recovery from a steep drop in first-quarter sales due to the coronavirus lockdowns.
The toymaker said its global manufacturing and distribution facilities, including in China where it produces 60% of its products, were largely back to operating at full capacity, echoing rival Hasbro Inc’s (HAS.O) comments from last week.
Mattel Chief Executive Officer Ynon Kreiz, however, cautioned that while he was expecting demand to increase towards the vital end-of-year holiday shopping season, any ramp up in production would be dependent on evidence of consumer demand rising in the coming months.
The company’s shares fell nearly 10% to $7.77 in extended trading, adding to an over 36% drop so far this year.
While Mattel did not provide a forecast for the second quarter, Hasbro had warned of a hit to sales in the in the current quarter.
Mattel, known for its Barbie and Hot Wheels toys, said net sales fell 14% to $594.1 million, in the first quarter ended March 31, short of analysts’ estimates of $652.7 million, as toy stores were forced to close in strict government lockdowns to contain the spread of the virus.
Kreiz told Reuters retail outlets, which normally account for about a third of Mattel’s sales volumes, were closed at the end of March.
Still, Mattel said it shipped about 750,000 plush toys based on the viral Baby Yoda character from the “The Mandalorian” Star Wars series on Disney+ in March and April and would be ready to meet holiday demand.
The company’s net loss widened to $210.7 million, or 61 cents per share, in the first quarter, from $176.3 million, or 51 cents per share, a year earlier.
Excluding items, Mattel lost 10 cents per share, a penny more that what analysts had expected, according to IBES data from Refinitiv.
Mattel said it had $1.6 billion credit line and enough cash on hand to weather through the crisis.
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