Mattel’s stock took its lumps on Friday but later recovered after the California toy company surprised Wall Street with a report of unexpectedly low sales over the holidays.
Falling sales of Middleton-based American Girl dolls and books contributed to the troubles for parent company Mattel.
For the last three months of 2017, Mattel had a net loss of $281.3 million, or 82 cents a share, on sales of $1.6 billion, down from a $173.8 million profit, or 51 cents a share, on sales of $1.8 billion for the same period in 2016.
It was a “surprise loss” for the holiday shopping season, Reuters said.
Mattel said the Toys ‘R’ Us bankruptcy had a big impact, as well as tighter inventory management by retailers. The company also took a one-time, $457 million charge related to new tax laws.
For the full year, Mattel swung to a net loss of $1.1 billion compared with a profit of $318 million for 2016.
American Girl sales for the fourth quarter were $217.3 million, down 23 percent from $283.9 million, a year earlier. For the full year, American Girl sales were $451.5 million, a 21 percent reduction from 2016’s sales of $570.8 million.
All of Mattel’s divisions reported sales declines for 2017, and CEO Margo Georgiadis said the company is taking “aggressive action” to “reset our economic model and rapidly improve profitability.”
For American Girl, that involved eliminating 57 jobs in January, including 21 in Wisconsin.
Mattel stock closed at $15.32 Thursday and dropped to $14.32 in early trading Friday before closing the day at $16.53 a share.
Analysts were cautious in research notes issued after the results came in.
Michael Swartz, of SunTrust Robinson Humphrey, titled his comments, “Santa Nowhere to be Found” but said he has “some sense that the worst may be in the rearview.”
Jefferies analyst Stephanie Wissink wrote, though, that while Barbie, Hot Wheels and Thomas train toys expect growth, “over 70 percent of the business (is) still struggling” — including American Girl.
“It’s still difficult for us to see a clear pathway to sales recovery,” Wissink wrote.