Fitch Downgrades Mattel

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Fitch Ratings on Friday downgraded the credit rating of El Segundo-based toy maker Mattel Inc. to BBB from BBB+ it said, because slipping margins and higher costs cast doubt on the company’s prospects for a turnaround.


The ratings change affects about $1.93 billion of the company’s debt. The world’s largest toymaker posted an 8 percent decline in worldwide sales of its flagship Barbie product line in the first quarter, including accounting for foreign currency exchange.


The company is posting stronger sales in other lines including Fisher-Price, but earnings margins are declining and Fitch said it fears deterioration of the business, Fitch said. The company is facing higher costs for materials and Fitch does not expect rising prices for the company’s products to compensate fully.

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