MAT - Earnings call transcript Q1 2018

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Operator

Good day, ladies and gentlemen, and welcome to Mattel Incorporated's first quarter 2018 earnings conference call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will be given at that time.

As a reminder, this conference call may be recorded. I will now turn the conference over to your host for today's call, Whitney Steininger. Ms. begin. may you Steininger,

Whitney Steininger

and everyone. operator, good you, afternoon, Thank

President Joining Officer; Margo Ynon are: Mattel's Margo Chief Dickson, as Joe Officer; Chief Executive Georgiadis, Mattel's Mattel's Richard Kreiz, call; Executive Financial following me Chief Euteneuer, Officer Operating and today Chief this and who Officer. will succeed

we Mattel's first know, financial quarter you As reported results. this afternoon XXXX

We results. will begin today's call by providing commentary on our

discussion with to then your questions. presentation. our provide a guide you provided time take today, will have We help we slide To

presentation reference adjusted income adjusted and EBITDA; adjusted non-GAAP and slide adjusted such our loss gross sales; currency. sales; adjusted constant measures or and selling and net as earnings depreciation or amortization gross per discussion Our or operating will adjusted administrative expenses; other gross share; EBITDA; financial loss; interest, adjusted earnings and profit margin; before

includes release Regulation by included Our Investor corporate.mattel.com. corporate website, financial earnings G in slide measures are of release our in and our documents presentation, financial regarding also information measures. both available is The required earnings section non-GAAP non-GAAP the and

in we Mattel the our Risk XXXX in public do so. and from presentation Report forward-looking in and are remind of certain with overall time, time the Annual make brands on our Report in release expressly as made based forward-looking Quarterly during this some XXXX number call, future cause disclaims of statements. and projected subject well XX-Q, These Form lines. Form uncertainties the materially statements. to available our forward-looking our these you differ Factors as section not accompanying and to obligation that We the may to our to begin, actual include I'd statements our and call to on performance statements statements of other business, that filings relating uncertainties Before statements the product like currently update any the of they those on are SEC from XX-K, could other information describe earnings a does significant risks results we to

like call I'd turn the to over to Margo. Now,

Mary Margaret Hastings Georgiadis

today's Thanks, joining everyone, for call.

news First, the address I would like last to week. announced

put down this last As today, has with and to team you know, CEO in and over strategy, place incredibly work been am Mattel clear of months It I specifically talented toy honor aggressive like a roadmap to an action as as we to the company I Mattel. a high-performing Joe transform partnership. XX took for would effective Richard thank their into stepping again.

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Ynon Kreiz

I'm our the to a company as new very company. its lead leadership its to as excited return opportunity plan as Margo. strategic Thank the high-performing toy Mattel deliver position you, and we'll CEO about on

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Richard L. Dickson

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quarter. in few me about provide a the performance Now, comments our let

can As with we results paying course and headwinds, And say continuity you business you see know, have in of conviction the quarter. significant on the strategy that off. could journey this execute that our efforts the stay team's I to been transform against to the this and despite is on

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POS moving you tighter shipping and to worked which alignment in we across As is to have geographic all know, get regions, results. contributing our hard

tough POS two to theatrical of growth the and in Looking of year-over-year XXXX. shift; Easter expect X will a two, result release a be the Cars as second ahead, one, June quarter comp we factors: softer due

deliver to to across our Wheels, Turning performance, brand Hot strong our Power continued performance particularly Barbie Brands, and regions.

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of each. summary a me Let provide short

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Warner have in We Disney, amazing and WWE. portfolio, Nickelodeon, partners our Universal, Bros.,

at saw launch Fair. Toy in exciting as half, them back programs of have the All you

For the quarter, Jurassic debuts we're in looking forward World movie, which the to June.

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reduce gaining to about the are right we work the place. in reshape headed direction toy that feel speed in the business. opportunity continue detail. conjunction and layers, Joe? ahead Simplification, the with to talent the Structural indications the I over early As the with investments maximize momentum to increase operation in and now in best through walk and agility quarter to we good I'll more what and delivering turn in would, with said right Joe strategic we team our call we we

Joseph J. Euteneuer

Thank everyone. afternoon, you, Richard, good and

will being no her with his Let had wish expertise the our partner. a invaluable on as new strategy great in great have a past me best I to Ynon doubt has forward we partnering year helm. all start tremendous him progress and and the I endeavor. at operationalize with look for that organization forward. She are plan by thanking Margo believe and the the I in her impact we be insights and our hands over

up "R" Toys the let's prioritized $XXX that, I'm to delivered sales progress quarterly with revenue report the to savings reversal. on Us investments. and our that on of X%, plan. So performance turn make impact reflects progress Structural transformation first our gross to The cost continued organization with our our We pleased initiatives top-line million excluding executing quarter to expectation on Simplification continues our results.

and is near-term on headwind execution our will unfortunate Toys event, to our us deliver liquidation basis Us a medium-term The consistent our objectives industry. a an in for quarter-by-quarter "R" Our shareholders. enable

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for We will then questions. line open the

the incurred the shared we a reversal I the liquidation gross up "R" a and which several the in United and related excluding reversal. our we States X%, Us in earlier, of combination bad United expense, to Us million "R" the $XX place. fall, and charges were Since revenue evaluated the have proactive primarily revenue Toys Toys to sales impact of through As of have Kingdom. plan first scenarios related debt QX, "R" quarter Us last Toys mitigation In

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what on revenue. parts we months, overall several XXXX view next will the of and remain clearer impact the a Over of should our have much TRU

revenue a of launch we and XXXX QX, to of comparability expect X look in due decline impact the the QX liquidation. we As the the TRU to Cars in year-over-year

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At year. to the year-over-year not cost expect our adjustment margin Structural our driven first our to significant into quarter savings low-XXs, primarily expected February, we year variance for year rate be we initiatives. in gross a Toy full We sales do you the Simplification expect by the increase told similar and over full-year XXXX to Fair

shared would our persist distribution likely XXXX, of challenges half that half and into first be that year. freight back towards the of XXXX timing the would savings weighted from the also of and We those the

in reversed impact the Us a our down the margin year. million quarter, first low-XXs, our margin the from first in of in the Toys benefit gross In the the first liquidation. committed quarter we "R" goods of Excluding quarter And was associated to of XXXX. This net sold result remain $XX plan. liquidation, of the was half cost with sales of line in "R" includes back a Us of the as majority coming with with Toys the full-year of year-over-year the reported XX.X% the the deliver XX.X%, gross

"R" accounting the accounting bad recorded Toys revenue treatment the Us quarter originally reversing consistent treatment when we debt of in Us in versus Our "R" bankruptcy. with XXXX QX for filed current is used Toys

freight negative Our reduction sales, quarter expected year-over-year our the the earnings we This XXXX. net adjusted was our the XX.X% facility materials quarter associated the in continuation from in year. gross the the in in of described of first is margin the the was call. as Structural Meanwhile, of expectations, were realized Simplification in inflation distribution of cost We back margin, be full-year half in-house a line are our last XX.X% year. the overhead first to half with of previously-outsourced this with actions, bringing deliver as primary The low-XXs. remain gross impact in to first decline be concentrated drivers and including raw in of well our the which plants, manufacturing logistics down expected expectations P&L to of implemented committed recently labor on our

on to advertising. Moving

February, we net advertising historical our rate optimize of sales to continue As full-year to we of our to return XX% range in as expect to shared spend. we XX%

advertising our this prior to of $XX Simplification, developed are and we've plans meet $XX to media approximately year to expected million us Structural million versus full-year that part As save goal.

severance and and partially At Now, full-year over for we increased Structural our strategic driven let slightly by year discuss outlook SG&A Simplification. restructuring said up be year, would incentive offset XXXX Fair, SG&A. me investments, Toy by cost,

million, included restructuring liquidation which year, and our expectation. first was SG&A Us over $XX million line year full-year quarter, to SG&A was $XX severance our a related to In costs the related reported quarter of million part overhead Structural and million "R" Simplification. $XXX of in expense the $XX bad as debt up First Toys with reductions

quarter prior primarily meet cost employee-related our full-year partially amortization First $XXX strategic from is year, million adjusted expectations. increased and offset year-over-year to $XX to unfavorable up increased savings Simplification. was non-cash expenses, exchange, increase of but compared on track investments, foreign by by Structural million driven our This SG&A was

$X.X give our update Now, benefit was let the million. quarter, income taxes. an you In tax me on first

may for during vary in we income of benefit due would U.S. provided overall rate our and recorded in that income is allowance benefit, taxable a of In established periods during any losses jurisdictions to the effective U.S. Our tax our and fact tax benefit no XXXX. the valuation the of assets loss, or In don't or due tax of expense we in income we tax from would quarter foreign XXXX on our benefit tax level no mix XXXX, that significantly losses. foreign third U.S. tax jurisdictions to jurisdictions allowance quarter deferred quarter of on as the in income valuation record losses the no quarter the periods provide record valuation and we with released. for allowance net income, first an income and no losses to

to for under today. in with the we expect we Additionally, the an Tax mandatory at the tax estimate of we be do the XXXX, year. have taxes prior not paid shared we what repatriation Act Consistent Fair, cash Toy similar to

to to have to tax to offset and cash material of balance payments. we be annual flows assets cash credits because repatriation the tax continue foreign not that our tax cash our use tax deferred expected sheet believe on We is we will the impact

with We impact during quarter cash offset included the balance the debt December of in sheet million Moving we the raised to a partially by the the which billion balance $XXX liquidity. $X the $XXX the of XXXX, benefit of first and repayment quarter. million, ended made

critical component capital. business transformation of Another improving our is working

$XXX days tightly over charges inventory owned resulting by of quarter, or result or over receivable in million, first year, QX and our reduction our During XX% outstanding inventory. year a sale year million improved due accounts XX% higher XXXX to our by a manage the in $XXX million primarily obsolescence and taken X-day declining as declining working continuing in to $XX year, capital

activities of expenditures, Moving million proactive cash first for drivers used down to working year of the Tooling management the quarter, was primary and over $XXX quarter were were the million $XXX an prior-year XX% the was for statement reduction. for of operations was which which planned usage first capital capital. capital the improvement primary flows to by million, The cash investing driven driver of quarter, year. expenditures this $XX of flows,

expenditures debt $XXX is about driver commitment of repayment full-year $XXX million. financing XXXX. in due million to with our the Our reduce alignment was March to The the capital in of primary spend of activities

borrowings no been have facility. lending there asset-based Additionally, against our

to capital business liquidity focus As we our will capital working our on cash, of work to execute expenditures. we transformation, through and our continue management

have we facility have through do availability of "R" expect adequate our cash liquidity Toys the to an and asset-based we access impact, While our to Us to the hand, continue lending on market.

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our savings are on initiatives cost revenue. Importantly, dependent not

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the We growth will returns cost with toy should continue of you will from over will taking on quarter. they help expect updates and confident high-performing we're provide to Mattel business provide the a along that the these our believe major each are out investments We you with reposition investments time company. the for future and

"R" close, to we for you continue to to accomplishment. open the shareholders, to you necessary steps the Positive hold we commitments I make thank lines hard their and questions. to create are long-term excluding the we'll we ourselves your I Toys for sales to impact value. work growth, now shareholder can sincerely assure want Before is great quarter. our and the the Us accountable for in time reversal, Thank a the taking today, you team And revenue first Mattel of

Operator

you. Thank

question Our from of of Conder first Wells Fargo. Tim the comes line

now is line open. Your

Timothy Andrew Conder

Thank a just couple you, here.

When by product little hands the the POS was we've to a that the it wholesale being week Wheels, of a we're of competitor. in given and it's But are seeing two, what again, completed? fairly and to that question of guess an track. the I the being the bit or assumed Hot that, And out being Barbie the on importantly color guess ultimately number be in of completed I there earlier stores, question that, well end on So are of more number will your sold completed liquidation? timetable TRU consumer? And one. views

Richard L. Dickson

Richard. It's I'll take So, the the Tim, first of question. part

Barbie work driving has Hot the these quarter. aligned context Wheels and getting XXX-degree and are the you with. been performance we're of the these play proud our for But shipment getting in and know, deep ultimately On now as and of the POS brands the incredibly portfolio front, brands systems traction that in

momentum. the I really continued is the of with behind believe results So future. we have that to of Barbie, we're and seeing maintain the course, right a these And quarter, Hot programs what we're expect great terrific we in we having think excited to have it, Wheels numbers, great beginning narration

Joseph J. Euteneuer

second to is part moving pieces maybe regards is pointing the summer, the Joe. TRU I many of think but so with the your In everybody This midyear, in liquidation. there's towards question,

You've Asia. on going got everything in

got what to predict. Canadian deal, and Smyths happened just hard with so You've got really it's the you've

Timothy Andrew Conder

has, pretty the Okay. debt we anticipate point that liquidity on will have now? another about just especially from operate also, feel the comfortable here, minimum of the that the you And you at of year looking with? ABL. the maturity going market, level out lower you company the And just to would forward cash a Joe, company And a do cash hand, this out talked

Joseph J. Euteneuer

billion and capital our the went then Remember, out restructured structure by in December, putting and doubt. $X.X Without ABL $X place. sort in we the of putting billion on a

So good that. about we feel

to-date. helps We We're had of ABL cost Structural company. the the take the on to It out program. on haven't draw focused the Simplification to

to have up the have the maturity we markets. XXXX. of access So We feel yeah, coming we May in we know

we feel pretty we're So well-positioned.

Timothy Andrew Conder

And, best Okay. of welcome Margo, aboard. wishes. Ynon,

Mary Margaret Hastings Georgiadis

Thank you.

Ynon Kreiz

you. Thank

Operator

you. Thank

comes Johnson BMO question of line Gerrick Markets. of Capital the next from Our

line now open. is Your

Gerrick L. Johnson

you have I the ask the question toy Ynon, industry the one hear Hey. Good year toy and we asked guess afternoon. within is I'll Margo same a ago. from criticism you experience. I don't come outside I guess industry

So toy to guess, and I someone you says what makes Thank experience a what you say company? qualified, who you don't would to have you. run toy

Ynon Kreiz

plans. operations than three as Thank of experience, more you, execution relevant you. I actually successfully nice value companies. But took of create toy and I having including from focusing work this Kids in of delivered experience XX served Chairman and shareholders, and than significant to ran to and to I Fox on I anything I my have that launched turnaround and bring deep to CEO at more years transformation meet have public. experience do

I where So I about good feel sit. pretty

Gerrick L. Johnson

about Okay. "R" Us. channel there other the is inventory all And, you at Toys inventory out retailers the right if talk excluding looking Joe, could How channel now?

Joseph J. Euteneuer

and back, to are customers, we the a and We're team our really mean, good. we tight to I very quarter like getting so about level. we – with good job inventories year-end first we're working we our very, well mean, bringing I mojo maintain very our continue executed in at a down the those did Very feel great positioning frankly. and feeling quite

monitor we we to that continue have basis have demand to and on before clearly going-forward supply. want a We

Richard L. Dickson

And as is I mentioned as well, our aligned. completely POS

anything In fact, performance. about level at there Is our about inventory it, add? feeling when good and we and this stock really our we're XX% you to look in want down at the levels

Gerrick L. Johnson

Great, thank you.

Richard L. Dickson

Sure.

Operator

Thank you.

Our next the question from line Kocharyan of UBS. Arpiné comes of

Your line is now open.

Arpiné Kocharyan

hear actually The you name Arpiné. Can is me?

Joseph J. Euteneuer

can. How Arpiné? doing, we are you Yes,

Arpiné Kocharyan

best Hi. Good, Joe, and how are Ynon, aboard, you? welcome wishes. Margo,

and a quantify had of shipments picture release my were is you retail excluding question, what comparing So When quick clarification. currency? Us base So in could excluding entirely the in Toys in reversal, to it mentions right? the constant constant Toys Us into of out just before currency would then "R" "R" percentage I just to business taking in Toys presume down, I last QX year. Us, would business referring be underlying or revenue What I then, So get QX? that QX the up to literally "R"

Joseph J. Euteneuer

of positioning. those sort of are think sort I and oranges apples

the But or those probably that is looking given take. probably X%, you're remember really haven't give delta We for numbers. what

Arpiné Kocharyan

digit? low-single Down

Joseph J. Euteneuer

Yeah.

Arpiné Kocharyan

helpful. you appreciate retail quite give well. But that's sales what could retail entire your sales, the No, And If the doing U.S. like entire on seems Barbie for adjusted portfolio that and just you can if will QX, quarter the Easter those for for retail were Hot color in great, portfolio in then Easter? have your overall and you on Wheels, are adjusted? sell-through International Okay. I but share be

Joseph J. Euteneuer

Yeah.

a take that disclosed look you. haven't can We for but information, at that we

Richard L. Dickson

What understand. trying big you're impact, it how I Easter and do, was? the to

Arpiné Kocharyan

Yes.

Richard L. Dickson

I you. number don't for momentum. I have think good pretty we have But that

Joseph J. Euteneuer

was and maybe Yeah, didn't the in earlier actually Barbie Hot about understand quarter. this the POS mid-single truly quarter. drive it's which really important that digit But Easter the to quarter. Easter weeks Arpiné, Wheels year, increases drove two provided

Arpiné Kocharyan

then half. be June And But and liquidation in that? consumer you past very Do half? that's retailer retail the Us, this on when helpful. you would telling visibility partners for difficult a Toys are have business back this really to No, terms any is what zero Right, will in take advantage of It's act color are the they on of what specialty over? plans right. likely you telling "R" your how major business. their going expand to forecast other There back out the of

Richard L. Dickson

Hot an with the I having I'll mean, including consumers all performance Target, their opportunity with the can and as also place add about that very retail we seeing great currently we're industry. take is Barbie in We're to all today of our eager that think it's Amazon on the and like conversations important the recognize certainly to world. share, start, based Wheels. think partners, momentum Walmart, anywhere. have commerce have around to the Joe strong course same and probably grow thing brands it. to opportunity productive POS for I others Everybody I also

necessarily So to doesn't destination have be oriented. it

the looking and have we're sure look in represents consumer at position, devices. on our opportunity we opportunity are with They we at As near-term despite they buy we anywhere seize on partners. in making that online, so the strong scale, that the conversations are opportunistic headwind the franchises our we're have base, to toys engage really great strong to so mobile a and store, And many are.

Operator

you. Thank

Citi. Badishkanian question line Greg from of next the comes with Our

Your line now is open.

Gregory Robert Badishkanian

Great. Thank you.

this flat realistic question exclude first how previous "R" of top-line your So the achieving year target Toys Us you if is impact? is

Richard L. Dickson

big Toys is to obviously, impact Us Yes, us. "R" a

is thought for you say end that just so some Fair Toy would top-line the we be were revenue you, million. from assuming back closures; our did announced was store stuff, they of had "R" and go said Toys Just XX-K that of about was before of XXXX, and about a it to basis size the we at to on bookends. liquidation if the doing which $XXX knew X% We we Us about we if at XX%. And sort that want you say flat we of

that, So you $XXX Toys this it's if you roughly $XXX us that "R" for would – take year give Us $XXX XX% million, would million, of take have been million. about

take you it's to, be we've don't of got that et we've bookend, Asia, Canada got to cetera. shipping that going So we if bad sort we're because think

in $XXX maximum it's being somewhere of million. sort and know between to we down flat So

Operator

Thank you.

question from of next Felicia Barclays. the Our comes line of Hendrix

now is line Your open.

Felicia Hendrix

but your tell continue Hi. big you. taking question Good for was that along picture that about the your know help must you on hoping business, you and my afternoon. could own you path Thanks that have stage. for out us to going the vision. a ideas questions. takes so was set Ynon, that Margo I us clearly, early could I understand own I hoping you're just

Ynon Kreiz

growth has look, higher The excited more profitable and toy very trajectory. IP-driven, I'm to company more high-performing an Mattel efficient, to Yeah, big-picture to a here. is is be opportunity transform that

world's We and brands. have very best toy of strong assets, some the including greatest

about. very good We strategy feel good team a have strong and we that have very a I

few of sit have I about But take plan feel company to for going we that to over faced So to confident and our not it business. deliver are be on. and to and significant still years headwinds easy. and the in shareholders. the transformation there our denial our on maximize last value now our areas what we do certain challenges we is is There's This key no focus where

Felicia Hendrix

Okay. help just to and I me that understand on Richard, That's this. we you. look helpful, hearing Barbie from forward have few clarifications to a about more

"R" is I the I that declines strong clearly Us? the have in and would been of a we Barbie the having saw could Barbie quarter of the how XXXX? sales was quarter but you that So versus wondering restocking having what was first you is And just us, momentum, wondering much if quarter help ex recorded growth Toys sharp in

Richard L. Dickson

Barbie all brand proud incredibly We're of a quarter. and across Sure. accounts. We've had terrific the globally performance

in role Anything campaign get that across purpose The Be the of lot work received every an to of message retailer and momentum, around models has and Toy continue Fair we incredibly as at you focusing saw As highlighted been brand. careers what a the of has product example You well world, also know at you been the which Can around traction. our on the board connection lines to our and

Us, get continues So for Toys Barbie to important Us was momentum. even But "R" account an obviously great "R" Barbie. Toys without

Felicia Hendrix

versus regarding the growth Okay. question? restocking And the – restocking

Richard L. Dickson

with affect association any I could impact no speak of that it. there's that No, would

Felicia Hendrix

very year. really saying you versus I'm have I last what that comps guess is easy

much you lower? how were shipping just Barbie the So inventories just where into it is that a market

Richard L. Dickson

it's No, literally POS world. and our digits all POS, has our double the been around about

in was we're line well. and on brand we that inventory our strong inventory line stocks the down momentum very POS, and inventory so quality we the Our approximately with our and our in The we course line XX% And of with driving are top is now where is the feel are the shipments. completely as about models feel line headed, in of have.

Felicia Hendrix

Okay.

Richard L. Dickson

the never better of brand. context Barbie the Shipping been has and POS in

Felicia Hendrix

wondering Do I XXXXs to balance question. the And to do great. plan in that's intend tap lower Joe, refinance you you still they're the how now then, finally a how given sheet Okay, market? was that just to XXXXs. just do when the trading or

Joseph J. Euteneuer

the is My Look, a some with so question. to open up the quarter billion got months are here we The out answer come the with to great $X to in just do We've have XX us. we on had that something. the working ABL. finished room the and recapitalization one, next to markets runway we belief

Felicia Hendrix

Okay, great. you. Thank

Joseph J. Euteneuer

Thanks.

Operator

Thank you.

Goldman Michael Ng Our the next question from of Sachs. of comes line

open. now Your is line

Michael Ng

Wheels, two the rest showed earlier Us, for a decline a as reversal for be as little Babies question. could wondering to that the think thinking quarter. could thanks bit I made year comment Toys second, to that which in three a Richard, Toys And Us, Fisher-Price's the us of of you have after "R" "R" I revenue if Hi, you follow-up unfolds? much was drove Us, Richard. indexed momentum should we just quantify Fisher-Price how this among brands came comment Thank of the for from you. strong about quarters the I most and the about then what "R" you that how just help about was

Richard L. Dickson

Sure, Michael.

working solid a category-driven year, emphasizing year. what was top moving which a Wheels Wheels been had last know on So also brand Hot you quarter Hot big play year play. as XXX-degree diecast into complete the really We've a great hard vehicle on within of just from was

increases, robust it's really Our platform, by Track content been well-received. which and have and incredibly business double-digit all our being seen has playsets YouTube driven

roll. that as So to you're some ways Hot momentum we expect going XXX-degree on and Wheels as events start out of that continue There's our some marketing building really XXth that will new world and extent, to maintain seeing are, Hot results work in the system we all hard and in quarters platforms really where series relevant from to Anniversary. digital celebrating consumers our our that of the programs the the will Wheels, around play, things be putting could been we've a to momentum, The of continue I have robust coming great our think progress.

is Us had a families. I to that a with relationships at other impact incredibly excited the obviously relates mom, to Fisher-Price, Fisher-Price. know, with share. mentioned, in "R" brand our make bigger and Fisher-Price have as But up they as prenatal, opportunity about with we are that it fact, As partners gateway And Toys you

to the not is volume product relationship. but capture that related opportunities only So that people Fisher-Price see

conversations. that we're So and They've for the while, known about advantage maximizing challenges been with we opportunities those obviously to of continue a going for TRU, taking taking place are world we've the brand. around as

Michael Ng

you. Thank

Operator

Thank you.

line question Riley. next B. of Anderson the Our from Susan of comes

now is line Your open.

Luke Hatton

growth. Hi, for ask, strong so to Luke of this Hatton delivered you international another I quarter wanted Susan. on just is

is you're planning I was working on what interested and maintaining going there, forward. thoughts just on then how So your growth that hearing in

Joseph J. Euteneuer

who region new starting really to have all running just a So I doing those is bringing guy momentum. is just things. think properties Europe, reorganized Peter, gain and We've a bear. some Asia-Pac couple under to is the fantastic One who we

you so we're some you what and of are what start doing the back momentum seeing we think? forward. that really some and people think movement with the gain just move had I well, is brands So Richard, to do starting

Richard L. Dickson

to add just would I that.

Brands traction new world marketing of consistent spent been been as off. and And has on reengineering we've Power media a lot the of think energy brands. A paying spending of relationships. architecture, driving to for focus on And is and those know, of time you're developing execution time around you I retail momentum. just see starting what Our line our lot those is beginnings the the

Luke Hatton

since Asia, have I'm just Okay, great. you think the then interested out details to up programs engagement And and on hearing whether this roll been to in I China following parent And launched you performing additional then any in on expect fall. on how Babytree about countries? that them

Richard L. Dickson

partnerships the We're continuing advancing. growing differentiate to to continuing develop These and our Babytree, partnerships market. enable with people us to and China in both they're in like Alibaba, are

of performance more partnerships and these well around some will of updates with working rest go the as particular We of making. are of partnerships the our progress on as in have will and expectations we rollouts, around our on these world. And they with as Asia where pleased that update all share, we're you but to with the we're to continue track really

Luke Hatton

Thank quarter. Good next luck you.

Richard L. Dickson

you. Thank

Ynon Kreiz

you. Thank

Operator

you. Thank

next Our Morningstar. of the line Katz question from comes of Jaime

Your line is open. now

Jaime M. Katz

taking Hi, thanks for questions. my

process brand Toy that rationalization First, guys you going I'm Box. SKU the curious the in were or about through

that a had remaining allocation the you and year, you wondering invest I number your Brands. brands improving I'm to how wanted think discussed at the whether to end that completed, behind no last of Power longer is and capital you process back in, that has of change allowed paring

Richard L. Dickson

something an process. SKU brand, of on on of a made and elimination in on brand, brands regards it. But but but things lot to really continue we managing tightly, work it. the that, might the focused progress the great and reduction think the we've that of an very, that be within are it's remember, I It's to ongoing isn't very each different

will added that in future. has to-date something provide benefit benefit and some the So it's provided

Jaime M. Katz

in is gap to added the of historically from last sort on or been you have have helpful. what rumored be Cars would then set so X $XXX the any to of movie gap fill would of World that you Jurassic help something And it's million have that year. sense movie do like add? insight think the I part years, Any

Richard L. Dickson

marketplace. with to get about depth We're of concentrating have for and expectations incredible been tell hit the out creativity, in the been on the we We We only June, And really that but Disney. strategically that make have That Cars. believe won't excitement and Cars. with are we're it's on a them on Cars share working important working are been but said, momentum. – exciting. partners property, can from of innovative part out best have we world, with total, very talking merchandise items, specificity ensure narrative obviously – partnership great have not the that to Box continue it's their is what necessarily incredibly to innovation We're for comes as being volume work trying reads that is product shelves. Toy flying note ultimately early Toy great we count. good that pleased has not continue an the product itself can closely off performance. Around the The some Box we've that so the to evergreen in you and closely in with and having that the performing Joe well. the a for our And we experience the I that that has will the up SKU we movie to really year very amazing there we it We've was

Operator

comes MKM line our of you. question the Handler Thank Partners. last from And of Eric

now open. Your line is

Eric O. Handler

Yes. Thanks for taking question. the

your of on it to a important more that it stores? of better off how continuing wondered Or shuttering digital-type retail is worth expand have that going American and the a stores, to more Girl efforts, of number business? focusing you're Is retail for those on some turnaround bricks-and-mortar presence Just maybe to model platform?

Richard L. Dickson

a can start CRM We're right. the which franchise, overhauling mortar, bricks evaluating also omni-channel ensuring not the and includes to it's Joe and Yeah. a the that on lot entire experience, this, I'll necessarily silver we equation you answer. in get and back, and Girl Customer step When bullet take continue value American best a of whether of or add. marketing the delivering origins pride price product that was to a we in-store programs and relationships, management, important that a at. get particularly exceptionally are catalog, started build online as of it brand, paramount Data is for direct as really is of to they part out as us direct effective loyalty brand future. more Proof attachment. brand, better

different Girl. All We take relationships sure that pride and of in that in-store have robust making the is really important a these on of when of but these as American and it's ultimately lot make that we've consumers and, what things to is a ingredients experience American is Girl mentioned, lot they there our work all up there in incredibly exciting, get parts. are do

Eric O. Handler

and stopping revenue American decline you view what would Girl as have far as to flatten? get So then take do long-term it a maybe to

Joseph J. Euteneuer

the we're key Yeah, I think realities areas are process turnaround talked we this off four these now that kicking about. in

So XXXX ultimately growth. and once the start be and get progress would idea into then making start that getting out we start back flattening to things to

successful. focusing as American lot parts have experiential repositioning to said, store experience on there's on are all the Richard doubt Girl do, We of key but a making direct, the to no that focusing

think the daughters. of gone maybe Girl are who at our experience American have dads is forever memories who through with us any keep we I

that. back to get will we So

Eric O. Handler

Thank you very much.

Operator

does the for closing Q&A today. And any over to hand you. that call I'd Steininger Thank regards. our session conclude back like to Ms. Whitney

Whitney Steininger

webcast There an be today. audio of beginning can or, pass participating Thank Eastern have and Investor Thank will code via a page this available you please and you, replay, operator. dial call webcast a The Time our day. PM be found The today's on replay for XXX-XXX-XXXX. at XXXXXX. X:XX audio great for in link is call

Operator

thank and in the gentlemen, participating program. you today's Ladies This conference. concludes for

now may day. Have You disconnect. a great

Mattel (MAT) 27 Apr 182018 Q1 Earnings call transcript