BETA
This is a BETA experience. You may opt-out by clicking here

More From Forbes

Edit Story

Amid Barbie Slump, Mattel Tries To Steer The Discussion Elsewhere

This article is more than 7 years old.

Barbie sales are still in a slump -- but toymaker Mattel  would rather not dwell on that.

On Wednesday, the company posted a wider quarterly loss, helped by a 3% decline in sales of the flagship doll. This casts doubt that a turnaround has taken root after, last quarter, Barbie saw its sales rise for the first time in two years.

However, Mattel would like everyone to keep in mind that it has more going for it than Barbie. "Remember, Mattel is not just a Barbie story," said president and chief operating officer Richard Dickson on a call with analysts and investors on Wednesday.

While that might be true -- Barbie only accounted for 14%, or $906 million, of the company's total revenue last year -- it doesn't mean interest has been lost. On the call, Barbie was mentioned 23 times, nearly twice as much as Fisher-Price (13 times) and more than Disney or Disney Princess (16 times), with one analyst beginning her question by saying "just to circle back once more on Barbie."

The truth is that Barbie remains a "critical core product" in Mattel's own words, and the company just poured resources into giving Barbie a big makeover. So it's only natural to wonder if and when these efforts are going to pay off.

Mattel is hoping to have wider appeal with consumers now that Barbie is available in three new body sizes -- petite, tall and curvy -- and has bigger career ambitions, with a recent advertising campaign carrying the tagline "You Can Be Anything."

This seems to have caught on in North America, where sales rose 11% during the quarter, and gives Mattel's Dickson reason to say that Barbie is "turning the corner and gaining more and more momentum."

Yet sales dropped 14% abroad, where Mattel says it has not yet launched its new dolls. This was a surprise, says BMO Capital Markets analyst Gerrick Johnson, who assumed the dolls would be in international stores by now.

Currency headwinds have also helped to take the pep out of Barbie's step. Sales of the doll would have been flat in the quarter if not for unfavorable exchange rates.

As with any comeback story, there's an understanding that it might be a bumpy road. "With the turnaround underway this will likely occur in fits and starts," said Morningstar analyst Jaime Katz.

Shares of Mattel, which are up 13% this year, fell 7% to $30.81 on Thursday.