Last week, Mattel reported first quarter net sales were down 3% for the first quarter of 2019 versus the prior year. Gross sales were also down 2%. Gross margins increased to 34.8% versus 30.9% in the prior year’s first quarter.
The company said the increase was primarily driven by savings from their “Structural Simplification” program. This program was responsible for a reduction of 2,200 employees in the summer of 2018.
The lack of Toys ‘R’ US bad debt also helped this year. The company said some of that was offset by product cost inflation and the recall of Fisher-Price Rock ‘n Play Sleeper.
“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,” said Chairman and CEO Ynon Kreiz.
Gross Sales in the North America increased 6% primarily driven by growth in Action Figures/Building Sets/Games (including Toy Story 4 and Jurassic World), Dolls (including Barbie and Polly Pocket), and Vehicles (including Hot Wheels and Matchbox). This was partially offset by a decline in Infant/Toddler/Preschool (including Fisher-Price and Thomas & Friends).
International Gross Sales decreased by 5% primarily driven by a decline in Infant/Toddler/Preschool (including Fisher-Price and Thomas & Friends), and Vehicles (including lower sales for CARS partially offset by increased sales for Hot Wheels). These declines were partially offset by growth in Dolls (including Polly Pocket and Barbie), and Action Figures/Building Sets/Games (including Jurassic World and Toy Story 4).