Consumers stocked up on board games, not Barbie dolls, amid the coronavirus pandemic, sending Mattel's sales in the first quarter tumbling.
While toy sales across the industry rose 7.6% between January and March, according to NPD data, it seems that lockdowns aren't giving all toymakers a boost.
On Tuesday, Mattel reported a 14% drop in sales, as dolls, action figures and toys for preschoolers were left on store shelves and websites.
Shares of the company were down as much as 10% on Wednesday before rebounding slightly to be down around 5%.
With schools and afterschool programs closed, parents sought out family-friendly games, outdoor toys and art kits to keep their children busy. Mattel has always been strong in the doll and car categories while not putting as much emphasis on categories such as games, construction and crafts.
During the quarter, Barbie sales slumped 10% while the total doll category fell 11%. The infant, toddler and preschool segment, which includes brands such as Fisher-Price and Thomas & Friends, cratered 28%. The action figure, building set and games category fell 21%.
Overall, the company reported a loss of 56 cents per share excluding some items on revenue of $594 million, while Wall Street expected a loss of 41 cents per share with revenue of $653 million, according to Refinitiv.
"We believe the factors that have been driving the category shift are temporary," CEO Ynon Kreiz said during the Tuesday earnings call. "And based on our most recent data, we expect that the industry will return to its pre-COVID-19 category trends."
Brands such as Hot Wheels, which saw sales bloom 5%, and games such as Uno and Pictionary were bright spots for the company during the quarter.
"Retail door closures and other distribution challenges added to difficulty in getting products into the hands of consumers," Gerrick Johnson, analyst at BMO Capital Markets, wrote in a research note Tuesday. "However, the company saw improving POS trends in April, and gross margin performance was better than expected."