Bad News For Barbie: Mattel Shares Plunging

Some analysts say Barbie losing her appeal and kids turning to electronics could be behind the declining shares.
Posted at 9:20 PM, Jul 17, 2014

Could kids really be losing interest in toys?

Toy giant Mattel's second quarter earnings report is mostly bad news, with a sharp drop in revenue driven by poor sales. (Via CBS)

The news drove stock prices down as much as 7.5 percent Thursday, making Mattel the second-worst performer on the S&P 500.

To make matters worse, it was some of the company's biggest brands that tanked. Barbie sales are down a whopping 15 percent. (Getty Images)

The Wall Street Journal says part of the problem is that Barbie might have lost her appeal.

But CNN says the bigger culprit is likely that kids just aren't playing with toys as much as they used to. Instead they're turning to electronics for their entertainment.

The American Academy of Pediatrics says the average child spends seven hours a day on electronics. That sure doesn't leave a lot of time for toys. 

But there might be a silver lining for Mattel.

​A writer for The Motley Foolsays while toy companies are struggling, Mattel might actually be able to turn things around, having spent the last year laying the groundwork for future growth.

Something the company's CEO Bryan Stockton echoed in a statement, listing accomplishments like buying Canadian toy company Mega Brands, reducing inventories and all around setting itself up for success in the second half of the year.

Mattel did have a little good news this quarter though. While Barbie isn't doing so hot, Mattel's American Girl doll sales rose by 6 percent.