Mattel misses quarterly sales estimates, announces it will cut over 20 percent of workforce
(Reuters) - Mattel Inc's quarterly sales missed Wall Street estimates on Wednesday, weighed down by the liquidation of key customer Toys 'R' Us and the absence of a big movie tie-in in the quarter.
The company also said that it will cut 2,200 jobs, or 22 percent of its global non-manufacturing workforce, and plans to sell factories in Mexico, as part of a $650 million cost-saving program.
Mattel's net sales fell 13.7 percent to $840.7 million in the second quarter ended June 30, short of the $851.8 million analysts had expected, according to Thomson Reuters I/B/E/S.
Revenue from the company's partner brands, which includes sales from toys based on movie franchisees fell 23 percent in the reported quarter.
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The company, like the rest of the U.S. toy industry, has been hit hard by the liquidation of retailer Toys 'R' Us and said the closure of its biggest customer dented its gross sales by 10 percent in the second quarter.
"We ... had a challenging second quarter driven primarily by the Toys "R" Us liquidation," Mattel's newly minted Chief Executive Officer Ynon Kreiz said.
Net loss in the reported quarter widened to $240.9 million, or 70 cents per share, from $56.1 million, or 16 cents per share, a year earlier.
Mattel had a total of about 28,000 employees as of Dec. 31, 2017.
Earlier in the week, rival Hasbro Inc reported better-than-expected quarterly revenue and profit as sales of toys based on big movie successes, Avengers: Infinity War and Black Panther, helped it pare losses from Toys 'R' Us' liquidation.
(Reporting by Uday Sampath in Bengaluru; Editing by Shounak Dasgupta)