Fitch Ratings on Feb. 23 downgraded U.S. toymaker Mattel Inc.'s long-term issuer default rating to B+ from BB, with a negative outlook.

Fitch said the downgrade is because it now expects Mattel's EBITDA and free cash flow to recover more slowly than it previously anticipated, following the company's weaker-than-expected 2017 results. The company earlier reported an adjusted operating loss of $167.1 and an adjusted loss per share of $1.08 million for full-year 2017.

"Execution missteps, including the inability of the company to effectively respond to evolving play patterns and ongoing retail challenges, with retailers cutting back on inventory purchases, and most recently the September 2017 bankruptcy of Toys 'R' Us, Inc., have pressured operating results and cash flow," the agency said, adding that these challenges hamper the company's near-term EBITDA improvement despite recently announced initiatives to drive topline growth and cost reductions.

The toymaker's secured asset-backed revolving credit facility was also downgraded to BB+/RR1 from BBB-/RR1 and its senior unsecured nonguaranteed notes to B+/RR4 from BB-/RR5.