Mattel’s net loss widened to $281.3 million in Q4 ended Dec. 31 from $173.8 million as net sales fell 12% to $1.61 billion,  driven by some “underperforming” brands and Toys R Us’ continued bankruptcy, the company said.

The increased loss was partly tied $43.6 million in restructuring and severance costs. While Mattel boys and girls brands posted a 1% gain in worldwide gross sales to $1.05 billion on a 9% rise in Barbie-related revenue to $349.7 million, a 33% drop in sales to $102.9 million in other girl’s products was blamed on declines in Monster High and DC Super Hero Girls. In Mattel’s entertainment business, revenue jumped 21% on increased sales of toys tied to Disney’s Cars franchise, which offset decreased revenue from Dinotrux and Minecraft items, the company said. In Fisher Price, revenue fell 12% to $533.8 million on a downturn sales of infant and preschool products and Thomas & Friends-related items. Gross sales of arts and crafts brands, including Mega Bloks and RoseArt, tumbled 25% $93.5 million.

Sales in North America, Mattel’s largest region, dropped 17% to $965.5 million. Mattel’s revenue from boys and girls brands in North America declined 8% to $477.7 million.

For the year, Mattel’s annual net sales fell 11% to $4.88 billion, a decrease largely tied to the company’s selling off excess inventory, which accounted for about 50% of the decline, CEO Margo Georgiadis said. Toys R Us’ bankruptcy represented another 30-40% of the decrease with lower sales of American Girl and Thomas the Tank Engine products accounting for the remaining 20%.

With Mattel having both cut its inventory levels by 20% and a better handle on Toys R Us’ plans for restructuring under bankruptcy, the company is forecasting sales this year to be even with 2017, Georgiadis said. The improved sales, she added, will be tied to “consistent” revenue growth from Mattel’s three “power” brands – Barbie, Hot Wheels and Fisher Price – while also “leaning into our top entertainment” licenses, including Universal’s Jurassic World: Fallen Kingdom film, Nickelodeon’s “Sunny Day” TV series and World Wrestling Entertainment.

Mattel also is expecting sales of Cars-related products to remain strong this year (coming off the Cars 3 movie in 2017). Cars-related revenue was “within the range” of the company’s target for $300 million in global retail sales in 2017, Georgiadis said. Mattel also has a license from South Korean animation studio Heewon Entertainment’s “Turning Mecard” anime series and its reviving its Polly Pockets collectibles after a test in Latin America.

With Toys R Us having unveiled plans to close 175 stores, Mattel has an “advanced understanding of what is happening versus” when the chain filed for bankruptcy last September, Georgiadis said, “so now we can plan ahead and ensure that we are having a conservative and thoughtful approach to how we are managing that partnership with Toys R Us.” Mattel is “cautiously optimistic about where Toys R Us is going,” CFO Joseph Euteneur said.

Contact:

Mattel, Joseph Euteneuer, Chief Financial Officer, 1-310-252-2000, joseph.euteneuer@mattel.com