The numbers: Not great. America’s largest toymaker reported a net loss of $11.2 million (pdf) over the first quarter, compared with a gain of $39 million during the same period a year ago, coming in below analyst expectations. Shares were down 2% in early trading.
The takeaway: The first quarter of the year, following a holiday season, is always a slow period for toymakers. But Mattel was hit especially hard by an “incremental severance expense” of $16 million (the company’s release says that it ”streamlined our workforce as part of our initiatives to drive efficiencies throughout the organization”). It also saw falling sales of Fisher Price toys, as well as its Hot Wheels cars. The world’s waning love affair with Barbie also pushed global sales of the doll down 14% for the quarter.
What’s interesting: Mattel has sustained its sales over the years, but like other toy makers, it faces competition from apps and games on tablets and phones that are increasingly capturing kids’ attention. Over the past three years, Mattel has been on a mission to make the ultimate toy gun, hiring the man who designed toys for the Pixar movies Toy Story and Cars and taking inspiration from another iconic play firearm, the Nerf gun. The new toy gun line, BOOMco, is designed to shoot darts straighter and faster, and should debut in the US this summer.