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Toys “R” Us Reports Q1 Results

Toys “R” Us reported financial results for the first quarter of fiscal 2017, which ended April 29, 2017. Net loss increased $38 million to $168 million for the quarter, and consolidated adjusted EBITDA was $44 million for the quarter, a decline of $35 million. Consolidated net sales were $2.2 billion, a decrease of $113 million compared to the prior year period. Excluding a $24 million negative impact from foreign currency translation, net sales declined by $89 million largely attributable to declines in the baby category. Consolidated same store sales decreased by 4.1 percent, driven by a 6.2 percent decline in domestic business. International declined by 0.6 percent, resulting from weaker sales in Europe and was partially offset by growth in Asia Pacific. Gross margin dollars were $783 million, a decline of $63 million compared to the prior year period. Excluding a $10 million unfavorable impact from foreign currency translation, gross margin dollars decreased by $53 million. Gross margin rate was 35.5 percent, a decrease of 100 basis points. Operating losses were $54 million, an increase of $47 million compared to the prior year period. Domestic segment operating earnings declined by $38 million primarily due to reduced gross margin dollars. International operating earnings decreased by $10 million due to increased operating expenses. Adjusted EBITDA for the quarter was $44 million, compared to $79 million in the prior year period. The above results produced a net loss of $164 million, compared to $126 million in the prior year...

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Mattel Plans to Reinvent Company and Deliver Enhanced, Sustainable Growth

Mattel unveiled its strategic growth plan during the company’s Investor Day event in New York City. CEO Margo Georgiadis and members of the management team presented the strategic plan and the company’s medium-term financial framework. Mattel’s clear strategy for growth is focused on building its Power Brands (American Girl, Barbie, Fisher-Price, Hot Wheels and Thomas & Friends) into 360-degree connected systems of play and experiences; accelerating growth in emerging markets; and transforming its innovation pipeline. Management anticipates that reshaping operations and reallocating resources will unlock substantial reinvestment funds for growth, and will improve speed to market. Mattel’s large base of consistent revenue from core brands will continue to produce ongoing cash flow; and the company will maintain a strong balance sheet to support its growth strategy. Mattel will focus on a five-pillar strategy: Build Mattel’s Power Brands into connected 360-degree play systems and experiences. Accelerate emerging markets growth with digital-first solutions. Focus and strengthen its innovation pipeline. Reshape Mattel’s operations to enable the strategy—leaner, faster, smarter. Reignite Mattel’s culture and team. The company has created a brand development framework to unlock the scale and profitability of its brands, based on Mattel’s global brands. Each one of these brands is founded on a globally relevant and accessible play pattern—dolls, cars and trains—which are sold at huge unit volumes, in the hundreds of millions. The company will leverage its scaled consumer base, the framework...

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Kids Time Fair 2017: A Look Inside Central and Eastern Europe’s Largest Toy Fair

by Reyne Rice and Lena Hedo The largest trade show for toys, games, and children’s products in Central and Eastern Europe, Kids Time 2017, was held in Kielce, Poland, from Feb. 23 to 25. The eighth annual international fair featured toys and products for babies and children, and recorded double-digit growth in key measurements, including more than 7,000 professional trade visitors and 474 exhibitors. With overwhelming interest from exhibitors and buyers, the event organizers filled a total of seven exhibit halls, covering 16,292 square meters (more than 175,000 square feet), and had a wait list of nearly 100 manufacturers. Next year, the show organizers plan to add an eighth temporary hall to accommodate more curated exhibitors. The Targi Kielce Exhibition Center, home of Kids Time, is the second largest exhibition center in this part of Europe. For the second year, the Kids Time Star Awards were presented at the trade show. Six winners were selected from a pool of eager and talented competition entrants across various categories, including toys, textiles, and baby products and furniture. Why a Central and Eastern European Trade Show Matters Export markets for international brands can reach into the Polish market and the 17 other countries that exhibit at this Fair. These surrounding countries include Belgium, China, Croatia, Czech Republic, Germany, Latvia, Lithuania, Netherlands, Romania, Russia, Slovakia, Spain, Sweden, Turkey, Ukraine, the UK, and the U.S....

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Coloring and Craft-Related Products Sales Grow Double Digits Ahead of Easter

From slime and foam to coloring and crafts, the latest trends around creative expression are driving U.S. sales of office supplies ahead of Easter, according to The NPD Group. The double-digit sales growth seen across coloring and art related categories suggests that a different wave of items may be joining the chocolate bunnies and stuffed animals in Easter baskets this year. Dollar sales for washi tape grew by 41 percent in the 52 weeks ending February 25, 2017, and actual unit sales more than doubled. Consumers are buying tape with patterns, logos, and designs, with those sales up 31 percent. These tapes are being used conjointly with gift wrapping, journaling, planner personalization, poster-making, and more. Colored pencil sets and coloring pages experienced the highest dollar sales growth in the industry during this time. Sales grew by $49.2 million (+27 percent)—outpacing total industry gains—and $39.7 million (+26 percent), respectively. The coloring trend has also positively impacted pen and marker sales; traditional pens and color and permanent markers grew a combined $45.4 million. Spring-related colors including green, purple, and violet were among the traditional pen colors experiencing the highest percent growth. Painting and paint supply category sales are also reaping the benefits of creative expression, driven by acrylic paint, which comprises one-third of category sales; paintbrush pens, which grew its sales by 47 percent; and painting accessories, the second largest category. Beyond...

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TIA to Host Washington, DC Fly-In Tax Debate for Toy Companies

As momentum builds on tax reform, trade, and regulatory reduction, the Toy Industry Association (TIA) is urging its members to attend TIA’s 9th Washington, DC Fly-In, where toy companies can share their concerns with key lawmakers. With the debate on healthcare reform now on the back burner, congressional and Trump administration officials are turning their attention to tax reform, including the controversial Border Adjustment Tax.  Taking place May 9 to 10, the Fly-In is free for TIA members to attend. During a series of meetings held over the course of two days, TIA staff and members will hold face-to-face meetings with policymakers and their staff members to discuss policies affecting toy companies, while also educating them on the positive developmental benefits of toys and the U.S. toy industry’s impact on the economy. In addition to tax reform, discussions will cover burdensome regulatory requirements, threats to imported products, trade barriers in other countries, and other important issues affecting the business of toys and play. TIA will schedule the meetings, as well as a dinner for all participants, and provide transportation to and from activities. Members who would like to attend the Fly-In may register online; and hotel reservations can be made via the reservation form. Questions about any of the above may be directed to Samantha Slosberg, TIA assistant manager of external affairs...

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