Monster High dolls are taking a bite out of Barbie.
Mattel said Wednesday its second-quarter net income fell 24 per cent, hurt by a continued slide in Barbie sales and a $14 million write-down on the toy maker's Polly Pocket line.
Its shares dropped more than 7 per cent in morning trading.
It was the fourth straight quarter of sales declines for Barbie, one of Mattel's biggest and most iconic brands, and Mattel executives said their Monster High and other girls doll lines were likely taking away some sales from the 54-year-old fashion doll.
Monster High dolls, which are based on teen characters that are offspring of famous monsters, have been a huge hit for Mattel since they were introduced in 2010.
"We've introduced new franchises that have fueled significant category growth for the industry," said CEO Bryan Stockton "The Barbie brand is likely being modestly impacted by their successes."
Still, Stockton noted that Barbie was still the largest doll brand and its sales continue to higher than when Monster High was introduced in 2010.
Toy industry sales have been in slight decline all year, hurt by cautious consumer spending, a video game industry slump and increased demand for electronic gadgets like smartphones and tablets. And while Mattel, the largest U.S. toymaker and maker of Monster High dolls and Hot Wheels toys, usually outperforms its rivals, the latest results show it is not immune to industry-wide declines.
CEO Bryan Stockton said the results reflect a $14 million asset impairment charge related to its Polly Pocket line as well as investments made to help the company grow in the future, investing in American Girl stores, and expanding in Russia and China.
In the April-to-June quarter, Mattel's net income dropped to $73.3 million, or 21 cents per share. That compares with $96.2 million, or 28 cents per share, a year ago.
Mattel didn't specify what it earned excluding unusual items. Analysts expected earnings of 32 cents per share but typically exclude unusual items from the estimates.