4Kids Entertainment announced its Q1 results today. The company narrowed its losses from the year ago period on sales down sharply. Sales were $10.2 million, down from $15.0 million in Q1 2008. 4Kids lost $2 million in the period, an improvement from the $6.4 million loss in Q1 2008.
Sales of the Chaotic TCG were only $437,000, down from $2.4 million in the year ago period. CEO Al Kahn attributed the decline to distributors selling down inventory rather than buying more games. This is a similar sales level to Q4 2008, which was also heavily impacted by the economy (see “Returns Hammer 4Kids Bottom Line”). Retailers have cut their inventory levels to 10-15 weeks of sales, from 20-30 weeks of sales.
Kahn did say that Chaotic sales were beginning to pick up in Q2, and that he expected improved sales as long as the economy did not continue to get worse. 4Kids is running TV ads behind Chaotic, and games played on the site have were up 37% between December and April.
4Kids licensing revenue was up in Q1 2009, with Monster Jam, Yu-Gi-Oh! and Cabbage Patch Kids the company’s top properties.
Kahn announced with the financials that the company has recently reached agreement with Cartoon Network for Yu-Gi-Oh! 5Ds and Chaotic to strip on Cartoon Network this summer (see “Yu-Gi-Oh! 5Ds and Chaotic to Strip”), one of several new TV deals. Chaotic launched on TV in the