Mattel, Inc. (MAT) on Q1 2021 Results - Earnings Call Transcript
Operator: Thank you for standing by, and welcome to the Mattel's First Quarter 2021 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question-and-answer session. Please be advised that today's conference maybe recorded. I would now like to hand the conference over to your host, Vice President, Investor, Dave Zbojniewicz. Sir, please go ahead. David Zbojniewicz: Thank you, operator, and good afternoon, everyone. Joining me today are Ynon Kreiz, Mattel's Chairman and Chief Executive Officer; Richard Dickson, Mattel's President and Chief Operating Officer; and Anthony DiSilvestro, Mattel's Chief Financial Officer. As you know, this afternoon, we reported Mattel's 2020 first quarter financial results. We will begin today's call with Ynon and Anthony providing commentary on our results. After which, we will provide some time for Ynon, Richard and Anthony to take your questions. To help supplement our discussion today, we have provided you with a slide presentation. Our discussion, slide presentation and earnings release reference non-GAAP financial measures, including adjusted gross profit and adjusted gross margin; adjusted other selling and administrative expenses; adjusted operating income and loss and adjusted operating income and loss margin; adjusted earnings and loss per share; earnings before interest, taxes, depreciation and amortization or EBITDA; adjusted EBITDA; free cash flow; free cash flow conversion, leverage ratio; and constant currency. In addition, we present changes in gross billings, a key performance indicator. Please note, that we may refer to gross billings as billings in our presentation and that gross billings figures referenced on this call will be stated in constant currency unless stated otherwise. In addition, please note, that our accompanying slide presentation can we viewed in sync with today's call when you access it through the investor section of our corporate Web site, corporate.mattel.com. The information required by Regulation G regarding non-GAAP financial measures as well as information regarding our key performance indicator is included in our earnings release and slide presentation, and both documents are also available in the Investors section of our corporate Web site. Before we begin, I'd like to remind you that certain statements made during the call may include forward-looking statements related to the future performance of our business, brands, categories and product lines. These statements are based on currently available information and assumptions and they are subject to a number of significant risks and uncertainties that could cause our actual results to differ from those projected in the forward-looking statements, including risks and uncertainties associated with the COVID-19 pandemic. We described some of these uncertainties in the Risk Factors section of our 2020 annual report on Form 10-K, our earnings release and the presentation accompanying this call, and other filings we make with the SEC from time to time as well as in our other public statements. Mattel does not update forward-looking statements and expressly disclaims any obligation to do so, except as required by law. Ynon Kreiz: Thank you for joining Mattel's first quarter 2021 earnings call. I hope that you and your families are staying healthy and safe. This was another record quarter for Mattel with truly exceptional results as we continue to improve profitability and accelerate top-line growth. We're off to a very strong start to 2021. Here are some key highlights for the first quarter compared to prior year. Net sales were up 47% as reported and 46% in constant currency, the highest quarterly growth rate we have on record in over 25 years and the highest first quarter sales in absolute dollars since 2015. Adjusted gross margin improved by 350 basis points and reached 47%, the 11th consecutive quarter of improvement on a year-over-year basis. Reported operating income was $31 million, an increase of $181 million in the first positive first quarter since 2014. Adjusted operating income was $28 million, an increase of 161 million and adjusted EBITDA was $89 million, up $155 million. This quarter was particularly strong in that we achieved double-digit growth in gross billings in each of our four regions, with remarkable performance in North America and EMEA. Double-digit growth across all product categories and strong double-digit increases in our three power brands, Barbie, Hot Wheels, and Fisher-Price and Thomas & Friends as well as American Girl. In the first quarter, we significantly outpaced the industry, with total company POS up more than 30% benefiting from very strong consumer demand for our products. According to NPD for the third quarter in a row, Mattel gained share globally driven by strong performance across all regions. We also saw growth across all sales channels, with especially strong performance in ecommerce as we continue to accelerate our progress in this strategic channel. In the first quarter, ecommerce POS grew 58% year-over-year, representing 28% of our total POS in the quarter. While our exceptional growth this quarter was partially driven by favorable year-over-year COVID related comparisons, we believe the strength of Mattel's results is attributable to the strength of our brands, quality and breadth of our product, our world class supply chain, global commercial capabilities and very effective demand creation in close collaboration with our retail partners. The strength of our performance is also evident when comparing our 2021 results to 2019 before COVID with net sales being higher by 27% in the first quarter of 2021 versus the first quarter of 2019. Anthony DiSilvestro: Thanks, Ynon. As you just heard, we had another outstanding quarter with results far exceeding expectations. Net sales were $874 million in the quarter compared to $594 million in the prior year an increase of 47%. Adjusted gross margin increased by 350 basis points from 43.5% to 47% reflecting the scale benefit of the exceptionally strong top-line performance, which more than offset the impact of inflation in the quarter. Adjusted operating income was a positive $28 million compared to a loss of $133 million in the prior year. The $161 million year-over-year increase was primarily driven by our top-line growth. Operator: Our first question comes from the line of Arpine Kocharyan of UBS. Arpine Kocharyan: This is a very strong quarter. My question is first, what drove that? We knew a very good demand out there but is there something structurally happening also that drove this very strong numbers? And then, your outperformance in Q1 would have implied full year going up by almost 4 percentage points and it's going up a little bit less than that. Does that mean you're being a little bit conservative or does the upper end of that range reflect that upside or what's going on in sort of implied guidance from Q2 to Q4? Ynon Kreiz: Thanks, Arpine. Yes, this was an exceptionally strong quarter. We believe we are in the strongest position we have been in many years. While the exceptional growth in the quarter was partially driven by favorable year-over-year COVID related comparisons, we think the strength of our own performance is driven by the strength of our brands, the quality and breadth of our products, the world-class capabilities that we have in supply chain and commercial capabilities and very effective demand creation in close collaboration with our partners, with our retail partners. The fact that we grew share for the third consecutive quarter, this demonstrates that we are not just riding the wave but leading the industry and driving the momentum. We expect to continue to gain market share through the rest of the year. And in fact, the strength of our performance is also evident when you compare our 2021 results to 2019 before COVID, with net sales being higher by 27% as between the first quarter of '21 versus the first quarter of '19. As we sit here today, we're seeing a strong start to the second quarter including Easter week and we are planning for another good holiday season. We believe we're very well positioned to gain momentum for the full year and are very confident about our business trajectory and the way forward. Anthony DiSilvestro: Yes. Just to add to that. It is early in the year, with the majority of our sales still left to go as Ynon said a strong Q1 ahead of our expectations and as a result, we are increasing our top-line guidance to that 6% to 8% range, which reflects our expectation for continued growth in top-line and share for the balance of the year. But with the quarterly phasing, that will certainly be impacted by the year-over-year comparisons. Arpine Kocharyan: Right. That makes sense. And Ynon you mentioned sort of strong Easter and we are almost at the tail end of April from what you're saying, it seems like strong POS has continued but you are fully comping sort of COVID boost here. Is that surprising to you, how strong the industry is despite sort of comping this enormous growth that we started seeing really at the end of March into April? Ynon Kreiz: We're big proponents of the toy industry as you can imagine, industry has proven its resilience and showing a very good momentum. The category showed that it's resilient in challenging economic times and parents continue to prioritize spending discretionary income on children. So this is a good place to be. And within that we are growing ahead of the industry for three quarters in a row. So as we emphasize this is not just -- we're not riding the wave, we are leading the momentum. And beyond '21, we continue to believe in the long-term prospect of the industry given the strong fundamentals and that we are very well positioned to accelerate our own growth and continue to increase market share. And you followed our story for over the last few years and you are seeing a consistent methodical improvement in our numbers both profitability and top-line. Our brand playbook is working very well and the momentum we are seeing is very broad-based. As we said in the prepared remarks, we saw double-digit growth in every region in each of the seven categories where we operate and strong double-digit growth in our three power brands as well as American Girl. So it's very broad-based, comprehensive performance and gives us even more confidence about the road ahead. Operator: Thank you. Our next question comes from Tami Zakaria of JPMorgan. Tami Zakaria: Congrats on the excellent results. My first question is, your second quarter compares from last year are far more easier than it was in the first quarter. So how should we think about the second quarter sales growth based on the trends that you're seeing and if Amazon Prime Day shifts to June versus October last year? Anthony DiSilvestro: Just as a reminder, we are lapping double-digit declines in the first half last year, followed by double-digit gain. So as I said, our quarterly comparisons are going to be impacted given our prior year performance. Also our guidance of 6% to 8% growth in constant currency does imply growth for the balance of the year. We're not going to break it down by quarter but as Ynon said, we're off to a good start in the second quarter. Tami Zakaria: Got it. That's super helpful. And then, one quick follow-up. Can you tell us how much was the industry growth in the first quarter? Ynon Kreiz: This is an NPD number which we can't share with you here, but we can confirm that we did grow market share. We grew market share in each of the four regions. Barbie continued to grow market share. This is just a whole story in and of itself, which I'm sure you might want to talk about later. Hot Wheels continued to be the number one vehicle property globally. Fisher-Price was the number one infant toddler, preschool manufacturer globally. And even if you look at our performance by region, in the U.S., we grew 30% faster than the industry and in EMEA, we grew almost 2x faster than the entire industry. So you're seeing market share gains across the board both by category, by product and by region. Operator: Our next question comes from Shawn Collins of Citigroup. Shawn Collins: My question is on cost inflation. Anthony, you gave us some good detail on cost inflation and its impact on margins. You also laid out some good detail on the last earnings call, and you've been very clear it's due to resin and overseas shipping cost. Can you tell us have these pressures increased in the second quarter versus the first quarter? And also are you seeing more pressure from the resin prices or from the shipping costs and if you could just provide us a bit of color around that that might be helpful. Thank you. Anthony DiSilvestro: Sure. The pressure is essentially equally weighted between resins and ocean freight. We're seeing cost inflation accelerate on both of those and that's the reason we have lowered our expectations for gross margin. On the last call, we talked about 200 basis point negative impact from cost inflation. We're raising that to $300 million in terms of the impact on gross margin but more than half of that is going to be offset by the expected savings on our optimizing for growth program and other gross margin benefits like scale and mix. But again, we're left with that decline of 100 basis points to 150 basis points. And as we said, these two items, although there are less than 15% of our total COGS, they are inflating by more than 35%, so a pretty significant impact on the gross margin line. Ynon Kreiz: But was by reference to basis points not he millions. Anthony DiSilvestro: The year-to-go period, we'll see more of a negative impact in the 240 basis points in Q1. Operator: Our next question comes from Steph Wissink of Jefferies. Steph Wissink: I have a clarification question, first on Tami's question on the guidance. I think Anthony your response was that you expect to grow through the remainder of the year. Are you suggesting we look at Q2, Q3 and Q4 together relative to Q2, Q3 and Q4 last year and that will grow or that you expect to grow each quarter in the remainder of the year? That's my first question. Anthony DiSilvestro: A month period Q2, Q3 plus Q4 combined. Steph Wissink: Got it. Very helpful. And then, my second question is just related to stimulus. When I look at your North American numbers they deviated a bit from the rest of the world to substantial outperformance on a relative basis. Any thoughts around the combination of the January and March, early April stimulus on the industry in your brands specifically, do you feel like you were a net beneficiary of incremental capital to spend and I think Ynon mentioned spending on kids being prioritized? Ynon Kreiz: We do believe the stimulus checks had some positive impact on consumer spending. But it's hard to attribute an exact number on that or the proportion. In the U.S., we are now beginning to comp last year's stimulus efforts and we'll continue to see how things evolve. But just to fine tune something that you said, we actually grew relative to market more in EMEA where we grew almost double the rate faster than the industry relative to the U.S. where we grew 30% faster than the industry. But in any event, we are entering the second quarter with momentum as we said. We are planning for another good holiday season. We expect to gain momentum over the nine-month period and growth for the full year at the guidance we provided. Operator: Our next question comes from Gerrick Johnson of BMO Capital Markets. Gerrick Johnson: Steph had a good question and I just want to follow-up on that a little bit. The first quarter is often a quarter you tell two cities. You've got the holiday and what we call ‘grandma money’ at the beginning of the quarter than towards the end of the quarter you have Easter. So you benefited from both this year, you had a tremendous amount of gift card redemptions at least that's the commentary out there. I was wondering if you knew how much gift card redemptions helped you this year. How much more of your POS was sold through gift cards? And then, Easter being maybe 10 days early versus last year and about three weeks early versus 2019, based on history, how much an early Easter traditionally helps you out? Thank you. Anthony DiSilvestro: Look, we are seeing a strong start to the second quarter including Easter and don't believe there was a pull-forward from Q2 to Q1 that was in anyway material relative to our very, very strong top-line result. I don't know the specific answer to the gift card question though. But with Easter it is difficult to calculate exactly the impact, but again we don't think it had a material impact. Gerrick Johnson: Okay. Maybe if I'm getting stumped there, may be I can ask one to Richard please. Richard, retailers seemed very conservative with stocking boys Actions last year with the general uncertainty around theatrical events. How are they approaching that category this year? Richard Dickson: Thanks, Gerrick. It's a light entertainment slate. Obviously in Q1, but we've outpaced the industry. We've been focusing on our key licenses such as Jurassic World, of course, which has had phenomenal success with Universal. WWE has continued to gain strength, Minecraft with Microsoft. Our focus is to take both owned and licensed IP from event driven brands and really make them truly evergreen, through product innovation, cultural relevance and as you know focused around purposeful play. We remain really bullish about the action figure category. We've embraced this challenger mentality in the category and we've been looking to gain and have proven to gain share in the category. We're anticipating, as you know, great growth as we look at our new entry with Masters of the Universe, content coming this summer on Netflix and our product offerings are winning, really in the marketplace with consumers. So look, we are very bullish on the action figure category. We're making incredible progress with our brands and we are really excited about the year ahead. Operator: Our next question comes from Mike Ng of Goldman Sachs. Mike Ng: I just wanted to ask about the growth outside of the power brands. I was just wondering if you could elaborate a little bit more on the action figures trends, up 101% year-over-year. Were there any particular licenses or brands that performed well? And then, just as a follow-up to some of the earlier questions about quarterly revenue phasing throughout the year. With the comp getting easier in 2Q versus 1Q, should we expect similar top-line growth in 2Q as we saw in this quarter? Thank you. Richard Dickson: Hey, Michael, I'll take the first part of the question. As I mentioned to Gerrick, we are incredibly optimistic and bullish on the action figure category. The whole category, according to NPD in the U.S. was up 43% in the first quarter. Mattel was actually up 56%, so we've outpaced the category resulting in some market share growth, which has been fantastic. WWE, Jurassic, these were the number seven and number eight properties in the category respectively. WWE elite figures were the number two item and we're most excited that Masters of the Universe Origins, this is the fifth item in the first quarter. So we're very excited about the progress that we're making, both on our evergreen brands and new brands to come. Anthony DiSilvestro: Back on the quarterly phasing, again, we are comping a down first half and a double-digit second half from last year. And as we said, we are raising our guidance to the 6% to 8%, which does imply growth for the balance of the year in aggregate. We're not going to split that by the quarters, but as Ynon said, we're off to a strong start in the second quarter and expect to grow balance of year both in dollars and in share. Operator: Our next question comes from Linda Bolton-Weiser of D.A. Davidson. Linda Bolton-Weiser: Actually, I just had two questions. First is just on Barbie. I think you said that the Barbie, your sales growth was quite a bit higher than POS growth. There was a bigger gap there than your other brands. So why was the gap figure for Barbie and should we be concerned about that? How are the retail inventories for Barbie? And then, my second question has to do with, we had a little bit of stock excitement with Funko when they talked a little bit about non-fungible tokens and it occurred to me that you guys actually have some of your own IP that you could sort of take advantage of in that area as well. Is that something that you have been looking into as well? Thanks. Richard Dickson: Hi, Linda, it's Richard. I'll take the first part of the question gladly by the way. It is true Barbie shipping did outpace in the first quarter. However, our Q1 ending retail inventory is roughly flat year-over-year, indicating that we're incredibly well positioned to continue the momentum into Q2 and to the back half. The truth is our doll category overall had a fantastic quarter. Gross billings up were 68%, POS growing 59%. The category of course was driven by Barbie's phenomenal performance. We'd love to repeat that gross billings were up 86% as you indicate, POS up 66% and this is healthy growth across all of our product segments. We have strengthened our position as the number one global doll property. We continue to gain market share in all four regions in the first quarter according to NPD. And ultimately our playbook is working. Barbie's cultural relevance truly has never been stronger. We've been leaning into diversity, inclusivity and social impact and we've seen this reflected in the success of Fashionistas, which also had double-digit increases. Design led momentum as part of the playbook with innovative products like Color Reveal, Barbie Extra, also drove incremental growth in the first quarter. So all-in-all we are incredibly confident in the brands continued momentum for 2021. We've got some incredible activations planned throughout the year. All new animated movie launches on Netflix. We also have a new Dream House which has been a blockbuster success for us and we're extending characters like Chelsea, Ken 60th Anniversary, and of course, as always continued surprise pop culture milestone moments. All-in-all we are very excited about 2021 and the future prospects for the brand. Ynon Kreiz: Thank you for the question. As the owner of one of the strongest catalogs of children and family entertainment franchises and the emphasis is on the ownership. We do have opportunities to commercialize our brands in new and exciting ways. We don't need to license the rights. We own the rights and we are looking at all type of opportunities including NFDs. This is definitely an area where we see opportunity, especially when you think about the built-in fan base, the collector segment for classic evergreen brands that we own and we expect to see opportunities there. Operator: Our next question comes from Greg Badishkanian of Wolfe Research. Fred Wightman: Hey guys, it's actually Fred Wightman on for Greg. Totally get the points on the cost headwinds from resins and transportation but can you talk about how you're thinking about pricing power to potentially offset that as we move through the year? Anthony DiSilvestro: Sure, I can address that. Let me make a couple of comments. First, I'd say it is our expectation that the combination of pricing and optimizing for growth savings will more than exceed the impact of cost inflation over time, expanding our gross margin and contributing to our mid-teens adjusted operating income margin goal. We're not going to talk about specific pricing actions or timing, but we are evaluating price adjustments for the recent increases in input costs. And I would also want to point out that, despite the cost inflation we're seeing and the impact it's having on gross margin, we're continuing to improve profitability and margin. Our adjusted EBITDA guidance of $800 million to $825 million represents growth of 11% to 15% and that's almost double our net sales guidance of 6% to 8% in constant currency. So continuing to make progress on profitability, despite the inflation challenges. Fred Wightman: Makes sense. And then, if we look at Hot Wheels, it didn't see quite the same sequential acceleration that we saw in the other power brands. It was still up double-digits, but not quite as strong as the others. Is that just a matter of having slightly tougher compares in the prior year period or is there something else to highlight there? Richard Dickson: Well, it's Richard. No, nothing to highlight, except our excitement around the performance of Hot Wheels. I mean, certainly, delivering double-digit growth on a brand with such maturity, continues to make us very proud. Clearly the leader brand in the vehicle category, I mean we were up 15% in the first quarter and POS was actually up 29%. We've seen broad-based growth across all product segments on Hot Wheels. Our Hot Wheel Track and Play Sets doing extraordinarily well. Hot Wheels Mario Kart, also POS triple-digits on that item and Hot Wheels Monster Trucks continues to also perform exceptionally well with POS, up 36%. We've got some great traction as well in the collector community. Recently for the first time ever, increased our membership on the Red Line Club, which is a DTC model. We've had incredible response. And we continue to be bullish on the year left for 2021 with Hot Wheels and beyond. Anthony DiSilvestro: I just wanted to clarify something I said earlier, we were discussing the Q1 and Q2 comps of last year. And I just want to clarify that the comp in Q2 is similar to the comp in Q1 relative to the prior year. Operator: Our next question comes from William Reuter of Bank of America. Mary Ann: Hi, this is Mary on for Bill. Thanks for taking our questions. So given that most of your product comes from Asia, are you changing the timing of receipt of fall product to avoid any potential disruption from the ocean trade shortages? Anthony DiSilvestro: Not, specifically. Our manufacturing and distribution network has been fully operational during the first quarter and situation certainly like the Suez Canal has had a minor temporary impact as well as the challenges related to the LA port congestion, which we've been dealing with those since the fourth quarter of last year. I would say our supply chain continues to effectively manage through these disruptions and there has been no material impact to our business in terms of getting product where we needed to be. Mary Ann: Got it. That's very helpful. And then, you've previously noted that you may be able to achieve investment grade ratings when leverage is in the range of 2x to 2.5x. Give a better sense of when you may able to get to this range? And would you consider any shareholder friendly activities before you get there? Anthony DiSilvestro: Look, I'd say we were making tremendous progress ahead of our refinancing transaction, all three rating agencies made multiple notch upgrade. We are solidly in the BB category right now, so again, significant progress there. If you look at our cash flow performance trailing 12 months, $305 million of positive free cash flow, 4x the prior year. We ended the quarter with debt to adjusted EBITDA on a trailing 12 months at 3.3x down from 7.5x a year ago, so tremendous progress. Our intention remains to use excess free cash flow to reduce debt in the near term and work our way back toward investment grade ratings. I can't say exactly when we'll get there, but we're continuing to make progress and our expectation is that with continued growth in adjusted EBITDA and the utilization of free cash flow to reduce debt, we will continue to make progress going forward. Operator: Our next question comes from Jaime Katz of Morningstar. Jaime Katz: I'll be quick since we're coming up on the hour. I'm curious what you guys have embedded as your industry outlook for the year? And alternatively, I guess if you don't want to answer that particular question, do you expect to continue to gain market share over the remainder of the year? Thanks. Ynon Kreiz: So, the industry is off to a strong start and again demonstrates its resilience and we believe we'll continue to be a strategic category for retailers. As we've said before, we expect that the search categories had benefited most from the early days of the pandemic, will be more challenged. These are outdoors, games and building sets. We believe the categories where we are a global leader, dolls, vehicles and infant toddler preschool will continue to perform well. It's hard to predict how the industry as a whole will perform for the full year. But we expect net sales for Mattel as you know, to grow at 6% to 8% in constant currency and that we will increase our overall market share. Beyond '21, we believe in the long-term growth prospect of the industry. And that we will continue to increase our own market share. So lots of opportunities ahead for Mattel. Operator: Thank you. At this time, I'd like to turn the call back over to Ynon Kreiz for closing remarks. Sir? Ynon Kreiz: Thank you, operator. We have discussed today our record first quarter that kicked off an exceptional start for the year, driven by very strong consumer demand. We are in the strongest position now that we have been in many years. We're navigating the uncharted territory of a global pandemic. The entire Mattel team is staying focused on the consistent execution of our transformation strategy. Following a third straight quarter of double-digit growth and increased market share, our results demonstrate the success of the turnaround and the significant progress we are making on our transformation to become an IP-driven high performing toy company. We thank you for your time and interest in Mattel. I will now turn the call back to Dave to provide the replay details. Thank you. David Zbojniewicz: Thank you, Ynon, and thank you everyone for joining the call today. The replay of this call will be available via webcast and audio beginning at 8:30 PM Eastern Time today. The webcast link can be found on our Investor page or for an audio replay, please dial 1-404-537-3406. The passcode is 8585728. Thank you for participating in today's call. Operator: This concludes today's conference call. Thank you for participating. You may now disconnect.
Mattel Tops Q1 Expectations but Pulls Full-Year Forecast Amid Economic Uncertainty
Mattel (NASDAQ:MAT) reported better-than-expected first-quarter results and paused its full-year 2025 guidance due to macroeconomic volatility and concerns over potential tariffs.
The toy maker posted a Q1 loss of $0.05 per share, narrower than the $0.09 loss analysts had projected. Revenue rose 2% year-over-year to $827 million, beating the $786 million consensus. On a constant currency basis, sales were up 4%.
Despite the strong start, Mattel opted to withhold updated full-year guidance, citing a lack of visibility amid shifting economic conditions and uncertainty surrounding U.S. trade policy. The company is taking steps to mitigate potential tariff effects, including diversifying its supply chain and adjusting sourcing strategies.
Gross margin improved by 140 basis points to 49.4%, reflecting ongoing operational efficiency. Mattel also reiterated its intention to repurchase $600 million in shares during 2025.
Performance across key brands was mixed. Hot Wheels posted a 4% increase in gross billings, while Barbie fell 2% and Fisher-Price declined 3%, signaling uneven demand across product lines.
Mattel Tops Q1 Expectations but Pulls Full-Year Forecast Amid Economic Uncertainty
Mattel (NASDAQ:MAT) reported better-than-expected first-quarter results and paused its full-year 2025 guidance due to macroeconomic volatility and concerns over potential tariffs.
The toy maker posted a Q1 loss of $0.05 per share, narrower than the $0.09 loss analysts had projected. Revenue rose 2% year-over-year to $827 million, beating the $786 million consensus. On a constant currency basis, sales were up 4%.
Despite the strong start, Mattel opted to withhold updated full-year guidance, citing a lack of visibility amid shifting economic conditions and uncertainty surrounding U.S. trade policy. The company is taking steps to mitigate potential tariff effects, including diversifying its supply chain and adjusting sourcing strategies.
Gross margin improved by 140 basis points to 49.4%, reflecting ongoing operational efficiency. Mattel also reiterated its intention to repurchase $600 million in shares during 2025.
Performance across key brands was mixed. Hot Wheels posted a 4% increase in gross billings, while Barbie fell 2% and Fisher-Price declined 3%, signaling uneven demand across product lines.
Mattel Inc. (NASDAQ: MAT) Reports Q1 2025 Earnings
- Mattel's earnings per share (EPS) fell short of estimates, but revenue surpassed expectations.
- The company has withdrawn its annual forecast, indicating potential market uncertainties.
- Despite challenges, Mattel plans to increase prices on American toys and maintains strong financial metrics.
Mattel Inc. (NASDAQ: MAT), a leading toy manufacturer, recently reported its earnings for the first quarter of 2025. The company revealed an earnings per share (EPS) of -$0.12, which fell short of the estimated EPS of -$0.11. Despite this, Mattel generated a revenue of approximately $826.6 million, surpassing the estimated revenue of about $791.5 million.
In light of these earnings, Mattel has decided to withdraw its annual forecast, as highlighted by CNBC's Courtney Reagan. This decision suggests potential uncertainties or challenges in the current market environment. The move to pull the forecast underscores the unpredictability in consumer spending, especially with the impact of tariffs affecting the toy industry.
Mattel's Chairman and CEO, Ynon Kreiz, emphasized the company's strong performance and operational excellence. He noted that Mattel's brands are thriving, and their products are making a significant impact in the marketplace. The company's robust balance sheet provides resilience and flexibility, enabling them to navigate the current macro-economic volatility effectively.
The company plans to increase prices on its American toys, a decision driven by challenges in predicting consumer spending due to tariffs. This highlights the broader economic pressures affecting the toy industry and consumer goods at large. Despite these challenges, Mattel's financial metrics remain strong, with a price-to-earnings (P/E) ratio of approximately 10.01 and a price-to-sales ratio of about 0.97.
Mattel's enterprise value to sales ratio is around 1.22, reflecting its total valuation relative to sales. The enterprise value to operating cash flow ratio is approximately 8.34, indicating the company's ability to cover its enterprise value with operating cash flow. With a debt-to-equity ratio of approximately 1.06 and a current ratio of around 2.43, Mattel demonstrates a strong ability to manage its financial obligations.
Mattel Inc. (NASDAQ: MAT) Reports Q1 2025 Earnings
- Mattel's earnings per share (EPS) fell short of estimates, but revenue surpassed expectations.
- The company has withdrawn its annual forecast, indicating potential market uncertainties.
- Despite challenges, Mattel plans to increase prices on American toys and maintains strong financial metrics.
Mattel Inc. (NASDAQ: MAT), a leading toy manufacturer, recently reported its earnings for the first quarter of 2025. The company revealed an earnings per share (EPS) of -$0.12, which fell short of the estimated EPS of -$0.11. Despite this, Mattel generated a revenue of approximately $826.6 million, surpassing the estimated revenue of about $791.5 million.
In light of these earnings, Mattel has decided to withdraw its annual forecast, as highlighted by CNBC's Courtney Reagan. This decision suggests potential uncertainties or challenges in the current market environment. The move to pull the forecast underscores the unpredictability in consumer spending, especially with the impact of tariffs affecting the toy industry.
Mattel's Chairman and CEO, Ynon Kreiz, emphasized the company's strong performance and operational excellence. He noted that Mattel's brands are thriving, and their products are making a significant impact in the marketplace. The company's robust balance sheet provides resilience and flexibility, enabling them to navigate the current macro-economic volatility effectively.
The company plans to increase prices on its American toys, a decision driven by challenges in predicting consumer spending due to tariffs. This highlights the broader economic pressures affecting the toy industry and consumer goods at large. Despite these challenges, Mattel's financial metrics remain strong, with a price-to-earnings (P/E) ratio of approximately 10.01 and a price-to-sales ratio of about 0.97.
Mattel's enterprise value to sales ratio is around 1.22, reflecting its total valuation relative to sales. The enterprise value to operating cash flow ratio is approximately 8.34, indicating the company's ability to cover its enterprise value with operating cash flow. With a debt-to-equity ratio of approximately 1.06 and a current ratio of around 2.43, Mattel demonstrates a strong ability to manage its financial obligations.
Mattel, Inc. (NASDAQ:MAT) Quarterly Earnings Preview
- Mattel's projected EPS is -$0.11 with revenue around $791.5 million.
- The company exceeded earnings expectations by 52.2% in the previous quarter but faces challenges ahead.
- Financial ratios such as P/E ratio of 10.09 and debt-to-equity ratio of 1.19 provide insight into Mattel's valuation and financial health.
Mattel, Inc. (NASDAQ:MAT) is a well-known toy manufacturer, famous for brands like Barbie, Hot Wheels, and Fisher-Price. As it prepares to release its quarterly earnings on May 5, 2025, analysts are keenly observing the company's financial health. Wall Street estimates an earnings per share (EPS) of -$0.11, with projected revenue around $791.5 million.
In the previous quarter, Mattel exceeded earnings expectations by 52.2%, although revenues fell short by 0.5%. Despite this, both earnings and revenues grew by 20.7% and 2%, respectively, compared to the same period last year. This consistent performance has led to an average earnings surprise of 37.6% over the last four quarters, as highlighted by Zacks Investment Research.
However, the upcoming quarter presents challenges. The Zacks Consensus Estimate for Mattel's loss has increased to $0.11 per share, indicating a 120% year-over-year decline. Revenue is expected to decrease by 1.2% to $791.5 million. Weak performance from one of Mattel's top three power brands may offset growth in other areas, impacting overall results.
Mattel's financial ratios provide additional context. With a P/E ratio of 10.09, the market values the company's earnings moderately. The price-to-sales ratio of 0.98 suggests the stock trades at less than one times its annual sales. The enterprise value to sales ratio of 1.22 reflects the company's total valuation relative to sales.
The enterprise value to operating cash flow ratio stands at 8.23, indicating the company's valuation in relation to its cash flow from operations. Mattel's earnings yield of 9.92% offers insight into shareholder returns. A debt-to-equity ratio of 1.19 shows the proportion of debt financing, while a current ratio of 2.38 suggests strong short-term financial health.
Mattel, Inc. (NASDAQ:MAT) Quarterly Earnings Preview
- Mattel's projected EPS is -$0.11 with revenue around $791.5 million.
- The company exceeded earnings expectations by 52.2% in the previous quarter but faces challenges ahead.
- Financial ratios such as P/E ratio of 10.09 and debt-to-equity ratio of 1.19 provide insight into Mattel's valuation and financial health.
Mattel, Inc. (NASDAQ:MAT) is a well-known toy manufacturer, famous for brands like Barbie, Hot Wheels, and Fisher-Price. As it prepares to release its quarterly earnings on May 5, 2025, analysts are keenly observing the company's financial health. Wall Street estimates an earnings per share (EPS) of -$0.11, with projected revenue around $791.5 million.
In the previous quarter, Mattel exceeded earnings expectations by 52.2%, although revenues fell short by 0.5%. Despite this, both earnings and revenues grew by 20.7% and 2%, respectively, compared to the same period last year. This consistent performance has led to an average earnings surprise of 37.6% over the last four quarters, as highlighted by Zacks Investment Research.
However, the upcoming quarter presents challenges. The Zacks Consensus Estimate for Mattel's loss has increased to $0.11 per share, indicating a 120% year-over-year decline. Revenue is expected to decrease by 1.2% to $791.5 million. Weak performance from one of Mattel's top three power brands may offset growth in other areas, impacting overall results.
Mattel's financial ratios provide additional context. With a P/E ratio of 10.09, the market values the company's earnings moderately. The price-to-sales ratio of 0.98 suggests the stock trades at less than one times its annual sales. The enterprise value to sales ratio of 1.22 reflects the company's total valuation relative to sales.
The enterprise value to operating cash flow ratio stands at 8.23, indicating the company's valuation in relation to its cash flow from operations. Mattel's earnings yield of 9.92% offers insight into shareholder returns. A debt-to-equity ratio of 1.19 shows the proportion of debt financing, while a current ratio of 2.38 suggests strong short-term financial health.
Mattel Drops 11% Despite Better Than Expected Q3 Results
Mattel (NASDAQ:MAT) posted Q3 results that exceeded market expectations, but this didn't prevent its shares from declining over 11% pre-market today.
The company announced an EPS of $1.08, surpassing the predicted $0.86. Additionally, its revenue reached $1.92 billion, beating the anticipated $1.85 billion.
Mattel's gross billings stood at $2.12 billion, boosted by a 10% increase in North America and a 6% surge in global gross billings. Adjusting its forecast, Mattel now expects an EPS of $1.20 for the entire year, a slight rise from the previous prediction of $1.15. They anticipate the full-year net sales to mirror the 2022 sales figure of $5.44 billion.
Even with these positive adjustments, investors seem to have reservations. The likely causes of their concerns are Mattel's unchanged sales forecast for 2023 and a modestly upgraded earnings outlook.
