Advertisement
YOU ARE HERE: LAT HomeCollections

Markets

Weak Action Figure Sales Help Slam WWF Shares to the Mat

September 28, 2000|From Bloomberg News

Now we know the economy truly is slowing: Not even The Rock and his wrestling cohorts can make their sales targets this quarter.

World Wrestling Federation Entertainment Inc., parent of a multimedia wrestling empire, said Wednesday that revenue will be less than expected for fiscal 2001, partly due to slow sales of some action figures.

Talk about a Smackdown: The company's stock (ticker symbol: WWFE) plunged to $12.75 in after-hours trading following the announcement. The shares had fallen 50 cents to $19.75 in regular Nasdaq trading.

WWF thus joins the lengthening list of U.S. companies that have warned of weaker sales and/or earnings in the current quarter.

Linda McMahon, WWF's chief executive and wife of co-founder and former wrestling star Vince McMahon, said sales will be about 3% below previous estimates for the fiscal year ending April 30, 2001.

That will mean earnings before interest, taxes, depreciation and amortization will be 8% to 10% below previous estimates, McMahon said.

The revenue shortfall will have a "modest impact" on earnings in the quarter ending in October, with the "majority of the impact" on the quarter ending in January, the firm said.

WWF, based in Stamford, Conn., said it failed to effectively manage its licensing program, which contributed to the revenue shortfall. Sales of older model action figures, made by toy maker Jakks Pacific Inc. (JAKK) of Malibu, were lower than expected, said WWF spokesman Tom Gibbons.

Jakks shares fell 81 cents to a 52-week low of $9.94 in regular Nasdaq trading Wednesday.

Revenue from WWF's affiliation with the National Hot Rod Assn., through which WWF races a car and sells sponsorship and merchandise, is also expected to be lower, Gibbons said.

"Licensing is primarily the driver of the decline," Gibbons said.

The company said the weakness in licensing will be "partially offset" by higher revenue from its pay-per-view business, resulting in an overall 3% sales shortfall.

WWF also said results for its new football league, the XFL, are tracking "in line with prior estimates."

WWF went public at $17 a share in October 1999. The stock has traded as high as $34.

Advertisement
Los Angeles Times Articles
|
|
|