Mattel Slips to Unexpected Loss After Severance ChargePaul Jarvis
Mattel Inc., the world’s largest toymaker, posted an unexpected first-quarter loss after taking a charge to cover the costs of workforce reductions.
The net loss was $11.2 million, or 3 cents a share, the El Segundo, California-based company said today in a statement, missing the average analyst estimate for earnings of 7 cents a share. The results included “an incremental severance expense” of $16 million, which cut operating income to $6.2 million.
Mattel had a lackluster holiday season, with sales sinking 6.3 percent -- the biggest quarterly drop since 2009. The maker of Barbie dolls and Fisher-Price in February agreed to buy Mega Brands Inc. for $460 million as it seeks to boost sales through expansion.
“For the first quarter, revenues were consistent with our expectations as we worked through inventories in a challenging retail environment,” Chairman and Chief Executive Officer Bryan G. Stockton said in the statement. “In addition, we managed costs and streamlined our workforce.”
Mattel fell 1.1 percent to $37.47 at the close in New York. The shares have declined 21 percent this year, compared with a 0.9 percent gain in the Standard & Poor’s 500 Index.