‘Barbie’ was again a bright spot in the first quarter at Mattel, which reported a loss due in part to costs associated with a recall of an infant sleeper (Michael loccisano)

New York (AFP) – Mattel shares jumped in after-hours trading on Thursday after it reported a smaller-than-expected loss that included a hit from a recall of infant sleeper due to infant fatalities.

The toymaker, whose brands include “Barbie” and “Thomas and Friends,” reported a first-quarter loss of $183.7 million, compared with a $311.3 million loss in the year-ago period.

Revenues dipped 2.7 percent to $689.2 million.

Sales of the company’s most famous brands were mixed, with “Barbie” and “Hot Wheels” rising compared with the 2018 period and Fisher-Price and “Thomas & Friends” falling.

Mattel’s Fisher-Price brand on April 12, in concert with the US Consumer Product Safety Commission, undertook a recall of its Rock ‘n Play Sleeper, saying the product was safe but that fatalities resulted when “the product was used contrary to the safety warnings and instructions.”

The recall affects some 4.7 million products and comes after more than 30 fatalities “after the infants rolled over while unrestrained, or under other circumstances,” the CPSC said.

Mattel said Thursday it had incurred $27.3 million in costs in the first quarter associated with the recall due to customer reimbursements and inventory write-offs. 

Additionally, executives said on a conference call they expect the removal of the product to reduce sales for the year by $30 million to $35 million below prior expectations.

Chief Executive Officer Ynon Kreiz told analysts he remained confident in the 89-year-old brand’s viability and that new product offerings in the second half of 2019 would be successful. 

Fisher-Price is known for toys, clothing and action figures for babies and small children.

“Fisher-Price has a long heritage of safety and quality going back almost 90 years. It is beloved by children and has the confidence of their parents,” Kreiz said.

“There may be some short-term impacts but looking at long-term, the Fisher-Price brand will remain strong and continue to be trusted by parents all over the world.” 

Faced with headwinds that have included the bankruptcy of retailer Toys “R” Us, Mattel has been in cost-cutting mode, speaking of a “capital light” model that is revamping its manufacturing and distribution system and reporting a steep decline in overhead spending.

A weak spot has been the “American Girl” doll brand, which suffered a 32 percent drop in sales. Kreiz said the company would introduce new products for the line later in the year in a major revamp that will involve YouTube content and social media influencers.

Shares were up 10.9 percent to $13.62 in after-hours trading shortly after 2230 GMT.

Disclaimer: Validity of the above story is for 7 Days from original date of publishing. Source: AFP.