Mattel said Thursday that continuing weakness in the worldwide toy market contributed to a $14.2-million net loss and an 8% drop in sales for the quarter ending Sept. 26.
The Hawthorne-based toy maker reported the third-quarter loss was also due to a charge against earnings of $19.6 million, associated primarily with the refinancing of notes due in 1989. The nation's No. 2 toy manufacturer recorded net income of $16.3 million for the same period in 1986.
The company had a net loss of $12.4 million for the first nine months of 1987, compared to net income of $18.6 million for the same period a year earlier. Third-quarter sales dropped from $344.4 million to $318.1 million.
Toy makers in general have suffered from a lack of exciting new products, and Mattel, in particular, has been increasingly dependent on sales of its mainstay Barbie doll line to make up for fading sales of such products as the Masters of the Universe collection of action figures.
John W. Amerman, Mattel's chairman and chief executive, said Thursday that while initial sales of Captain Power--a new "interactive" spaceship toy--are encouraging, the company expected that overall sales for 1987 would do no better than approximate last year's $1 billion. Amerman said the company had strong hopes, though, for the new line of infant and preschool toys that it recently agreed to develop in conjunction with the Walt Disney Co.
Without citing specifics, Amerman said Mattel's efforts to reduce operating expenses--among the industry's highest--were beginning to be reflected on the company's balance sheet. Last month Mattel closed its last U.S. plant, a 250-worker factory in Paramount, and transferred the work to Mexico, where labor costs are lower. Earlier in the year, Mattel laid off 150 workers at its corporate headquarters and eliminated another 150 jobs through attrition, slicing deeply into executive ranks with the goal of saving $6 million this year and another $20 million next year.