The global company that is vastly known for manufacturing toys that are both fun and educational recently unveiled their performance from the previous quarter. The company struggled to make a significant impact from the previous quarter due to spiraling effect from Toys R Us’ bankruptcy.
Mattel’s signature Barbie has been falling behind in sales as the same dilemma from Toys R Us’ begins to creep in. The toy company has been beaten to a pulp after they reported their third-quarter figures as its shares plummet afterward.
Mattel Q3 Performance
One of the main highlights we can all take from Mattel’s previous quarter is the massive drop in their worldwide net sales; the company suffered a massive 13% decline on the period or a total of 14% in constant currency.
On the other hand, the company’s worldwide gross sales were also down by a whopping 13% according to report or a total of 15% in constant currency. According to the company’s report, the bankruptcy filing announcement by Toys R Us’ took a massive toll on the overall performance the company had from the previous quarter.
To be more specific, Mattel suffered tighter inventory management and a massive challenge from underperforming brands.
According to the company’s CEO, Margo Georgiadis, "Our Q3 performance was clearly disappointing, led by compression in North America driven by Toys "R" Us filing for bankruptcy, tighter retailer inventory management and challenges with certain underperforming brands,"
The CEO also mentioned that "Despite these challenges, we are making strong progress against our transformation plan, which we believe will deliver step-change revenue growth and profitability. To accelerate progress toward these goals, with our new leadership team in place, we are taking bold steps to simplify our business and right size our cost structure in alignment with our strategy.”
More on Mattel’s Q3
As a result of the weak Q3 figures, the company reported that they are going to “significantly expanded initiative to structurally simplify business and right-size cost structure in alignment with strategy” and that the company is also looking to trim its net costs in the next two years; the company is looking to cut a total of $650 million.
Mattel is also looking to apprehend the dividend starting this fourth quarter in an attempt to increase their “financial flexibility, strengthen the balance sheet and facilitate strategic investments.” According to the company’s report, the loss per share was about $1.75.
The drop in the company’s share has heavily impacted the non-cash charge related to a valuation allowance on U.S. deferred tax assets which as $562.9 million, while the adjusted earnings per share were $0.09.
Mattel’s Stock Crashes
As a result of the lackluster quarter performance, the company’s shares
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