Mattel posted a smaller than expected loss for the first quarter on Tuesday, thanks to cost control by the Barbie maker, while demand for its toys and games remains tepid.
The toymaker plans to abandon less profitable brands, consolidate its American Girl operating segment and streamline its supply chain as part of its efforts to achieve $200 million in cost savings. here 2026.
“We started the year well with a significant increase in margins and a very strong improvement in free cash flow,” CEO Ynon Kreiz said in an interview with Reuters.
Mattel’s gross margin increased 8 percentage points to 48% in the first quarter, driven in part by lower input costs and inventory management expenses.
Its rival Hasbro, which expects a larger drop in turnover during the first half of 2024, has also made workforce reductions to reduce costs. The company is scheduled to report its first quarter results on Wednesday.
Mattel’s first-quarter revenue of $809.5 million missed estimates of $831.8 million. The company reported an adjusted loss of 5 cents per share, compared with estimates of 12 cents, according to LSEG data.
The company, which reaffirmed its full-year sales and profit forecasts, said in February that it expected the toy industry to decline in 2024, but at a slower pace than in 2023.
Kreiz said Tuesday that while sales declined, consumer demand trends improved during the quarter.
Net sales in its North American segment rose 2% at constant exchange rates, compared with a 27% fall a year earlier.
Worldwide gross billings for Barbie, Mattel’s largest brand, increased 0.3% in the quarter, while Hot Wheels’ gross billings rose 5%.
