American toy business, Mattel, has released its first quarter 2019 results, reporting that net sales were down three per cent to US$689.2 million compared to Q1 2018.
Gross sales for the business also declined in the period, down two per cent to US$780.1 million.
In terms of major categories for Mattel, only the infant/toddler/preschool segment reported a decline – slipping 15 per cent – while gross sales of Fisher-Price and Thomas & Friends declined eight per cent.
Meanwhile, Barbie and Hot Wheels experienced increases in the first quarter, with gross sales up seven and four per cent respectively. Mattel also saw the action figures/building sets/games category jump up – thanks to strong sales of Toy Story 4 and Jurassic World products – with gross sales increasing by 18 per cent in the period.
Internationally, net sales declined four per cent, while in North America, net sales increased by five per cent in Q1.
Reported operating loss for the business was US$131 million, which is an improvement of US$145.6 million.
Measures put in place as part of the structural simplification of the Mattel business saw US$610 million of run-rate savings, which is expected to exceed the goal of US$650 million by the end of the year.
Chairman and CEO of Mattel, Ynon Kreiz, said that the results demonstrate that Mattel is on-track in its transformation process.
"This was another strong quarter, demonstrating meaningful progress in the execution of our strategy, a significant improvement in profitability and a solid performance in our topline.
"The positive momentum exiting 2018 has continued and is reflected in our operating results. While we are in a multi-year turnaround, we remain on-track to achieve our goals to restore profitability and regain topline growth in the short-to-mid-term and capture the full value from our IP in the mid-to-long term.
"I continue to be inspired by the commitment and capabilities of our organisation as we build shareholder value and transform Mattel into an IP-driven, high-performing toy company," he said.
CFO of Mattel, Joseph Euteneuer, said that this report represents consistent positive results.
"This represents the third consecutive quarter of improvement in our key profitability metrics, including gross margin, operating income, EBITDA and EPS.
"We have achieved US$610 million of run-rate savings from our structural simplification program and expect to exceed our goal of US$650 million exiting 2019.
"We have begun implementing our Capital Light model and look forward to starting to realise additional savings in 2020," he said.
To read the full Q1 report from Mattel, click here.