Earnings call transcript Q1 2023

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Operator

Good afternoon, my name is Abby, and I will be your conference operator today. At this time, I would like to welcome everyone to the Mattel Incorporated First Quarter 2023 Earnings Conference Call. [Operator Instructions] After the speakers’ there will be a question-and-answer session. [Operator Instructions]

Thank you. Mr. of you President conference. begin Vice Zbojniewicz, Investor may Relations, your David

David Zbojniewicz

you, everyone. afternoon, and Thank good operator,

Joining are Chief Officer; Richard Anthony me Chief Mattel's Dickson, and today DiSilvestro, Mattel's Ynon Kreiz, President Financial and Chief Operating and Chairman Officer; Officer. Mattel's Executive

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

today, and with supplement and we time some will providing begin have Anthony take on To commentary we Richard, questions. to will discussion with We presentation. Ynon our you today's our provide for call Anthony a results which provided Ynon, after slide

non-GAAP share taxes, free-cash net-debt presentation measures, adjusted Our before adjusted earnings selling tax or operating discussion, slide and adjusted income leverage flow loss operating rate, depreciation adjusted EBITDA, amortization margin, adjusted release per and and interest, or may flow, EBITDA, free-cash profit constant-currency. or reference expenses, adjusted ratio, adjusted conversion, loss income financial gross administrative margin, and other earnings including and and gross earnings adjusted

In our addition, in Please call, stated to unless billings gross as on key we figures gross gross billings referenced otherwise. may in a in that billings be we note stated this present and refer that changes presentation will performance indicator. constant-currency billings,

impact POS consumer to references our presentation, today's For our demand related exclude Russia to all and XXXX. shipments in the pause, to decision given business into Russia

our Investors website. slide presentation, also documents included our performance website, of regarding is and corporate our with as sync corporate available section G you Our our through in earnings are The regarding by in Investors can today's well release both information call when of slide section viewed financial key be presentation as access it information in the measures, non-GAAP and the Regulation corporate.mattel.com. required indicator

its developments procedures, most financial results closing in and to information the disclosure a company's results result available results company's from between current The the the public slide by of press the registered preliminary represent completion when final company's may financial independent of and results. review XX-Q disclosed other these included of preliminary Form now adjustments, the may as of that and actual arise management. The completion presentation differ release the final firm the in the accounting

their we I'd made statements our to during that future uncertainties Before future call brands, currently those number subject nature statements they uncertain. product actual the and cause you are forward-looking, the lines. caution the available a These of assumptions, forward-looking to that including Any on make to like to could we begin, our related differ results certain and statements. statements categories based risks are significant are statements the performance and and in about from by are information of projected business,

XX-K, and described Report XXXX Form do disclaims filings time-to-time to SEC presentation and some except law. statements as not required from of well in forward-looking other the of our on We earnings Risk and make in so any Annual we statements. the expressly Mattel release update other section public obligation these does Factors uncertainties as our the by as with

over call the to turn to Ynon. like I'd Now

Ynon Kreiz

Thank first you call. our earnings for joining XXXX quarter

for negatively and absolute first demand both well, growth our in relative performed gains terms retail inventory overall said, quarter consumer impacted underlying Mattel. and were business That As product anticipated, our levels. results in share market by with the elevated for

XX% as at $XXX to negative million or compared EBITDA sales Looking year, reported An adjusted for XX% million. in financial metrics quarter, to as $XX constant declined last key net declined a currency. the first

which to retailers the the to was season. in primarily decline negative benefited inventory year-ago the to and building the which from managing impact quarter from the quarter, levels, due year retailers first due were entering Our elevated also comparison earlier

in POS as in globally action growth POS leader comparability, gained and the total categories, and for Circana, announced Mattel North as and figures known America. formerly was our share per up mid-single-digits sets. double-digit Russia with well international in three company NPD flat Excluding as segment, Group. building

This portfolio. impacting corrected retailers by believe broad-based the inventories to this continue and strong second half. gross in to first Reflecting confidence and adjust the the our year. quarter, end to that negatively strength further situation in repurchases market-share We be the in we the resumed will quarter of billings speak the our repurchases financial our strategy, of look position share gains and make will

strong. fundamentals The are of business our

outpace expect gain full-year industry, market-share guidance. to and achieve the We our

with Fisher-Price was and managing billings gross retailers High are our exception at Hot With quarter, products Disney a which inventory of to grew. the levels of the Vehicles, in Princess and declined power respect categories elevated the rollout up. all result of Barbie Looking declined as both The good Monster Frozen launch to Wheels off global a start. while and brands, of the

by in billings gross outpaced power all categories double-digits significantly POS and all brands.

and business been entertainment executing have offering. strategy We grow expand Mattel's to successfully IP-driven our toy our

recently Barney our the agreement releasing we separate a side announced agreement The toy and with Wish of of the we upcoming company, co-branded licensing relaunch licensing of new a the November to of ahead part line and Disney's as release. year. last On Hasbro of this first-ever create for in agreement Disney, our toys and theatrical license launched games Little the Mermaid Disney of and weekend dolls new

challenge publishing the HGTV, new mixed and Gap. value our recently this accessories PlayStation partnership summer. toy and business Rally with aisle Hot capturing Wheels launch reality Live the for on apparel challenge. our series new Rift on show Dreamhouse airing iOS racing both in on game and Wheels in multiyear home of High progress the Barbie and Monster new The made ultimate own tour, a outside Hot NBC makeover the also competition primetime We announced IP and

for XXst. of movie, the which Barbie of the Excitement July continues build premieres films anticipated to year, most worldwide on one the

movie. momentum was teaser media social of earlier and more second this activities towards expect global significant with accelerate coverage, release The to released the marketing month in the

end positive our product return impacted more quarter by the in market to of well growth retail will first the management We share. aligned results, patterns, situation with inventory half consumer the trends the in retail with for continued business anticipate while first to and a In inventory the second-half. believe the be shipping demand underlying historical and closing, overall corrected perform

Overall and consumer achieve product we expect our demand to good off a full-year to for start guidance. our is

balance Our strong sheet provides the flexibility is in a growth. position support to and

are create well-positioned We and executing to multiyear strategy shareholder continue our long-term value.

over will now. the call Anthony. And I turn to

Anthony DiSilvestro

Ynon. Thanks,

in our first retail impacted were Ynon by levels. As said, inventory movements results quarter negatively

entering The which building benefited of earlier the in to managing retailers primarily year-ago first and year impact to negative were to quarter's season. the from the the quarter, due retailers was levels, which due decline elevated also the from inventory comparison

First of mid-March, quarter the or at outlook favorable million driven slightly timing we constant-currency, Net sales ahead results in the XX% were compared shipments XX% the declined quarter-end. $XXX of to prior provided of in year. by

quarter absolute Mattel However, in industry relative both grew the market gross we saw billings. in which performance terms, significantly outperformed the and POS mid-single-digits and outpaced positive and gained share.

POS associated and reminder, related scale consumer business. basis-points a Russia the declined the sales exclude our Adjusted management XXX including to margin and impact to negative impact decline. with to inventory the costs gross demand several due As factors, XX%,

to $XXX to and a adjusted the Adjusted a $XXX Adjusted negative primarily compared a a negative declined $XX to million million, million to $X.XX operating declined a EBITDA by EPS margin. by year-ago due negative gross lower lower was adjusted positive million. income sales and $XX $X.XX

for to consumer shipping be the trends improve expect patterns second-half. the demand revenue and the revert through historical We full-year year to positive comparisons to as in

declined that mid-single-digits. POS impacted levels movements had an from It Turning was on as categories in including retailer XX%, increased impact X billings in Russia. inventory gross small our negative positive primarily consumer for gross billings to point by was constant-currency, overall a a seasonally performance demand while across outsized products impact quarter,

POS XX%, declines in in was which POS Frozen. dolls and by theatrical were shipping, shipping offset increased due for and impacted Disney primarily of low-single-digits. with declined Princess movie. QX XX%. the to down release Dolls but the high-single-digits, partly than into promotions POS Barbie, High better significantly and Monster growth better shift for by declined the align of to Barbie also Barbie

X% share Hot Vehicles. the Circana. category the market over doll achieving vehicle's share basis-points gained record market was in the of primarily in Barbie QX and die-cast of market-share Growth grew per driven basis-points Dolls Mattel on globally POS low-double-digits. category XXX property over Vehicles XXX with in by gained number-one the QX Circana. Wheels, per Mattel was up highest

year. was Infant, preschool optimize POS POS we XX% we in theatrical while XX the aggregate market-share up down of and Infant, low-double-digits. preschool Action the the low-double-digits. offering, one basis-points was due in Challenger in and Mattel toddler, by as the Circana. company number growth toddler XX%, toy the offset the primarily quarter categories tie-ins in gear declined baby People POS prior per category Imaginext. declines lap and declined as lower partly in Little sales globally to gained Figures was were in in

North declined America number POS Russia in Mattel Mattel a in including from market-share regional America to our per the to double-digits. extending retail and one declined to XX%, impact Circana, reflecting retail negative in XX-point grew Latin double-digits. With in EMEA Circana. POS respect XX% QX, flat, Latin X%. market-share also position. inventory was reflecting year gained North increased headwinds. POS gained market America last QX. compared headwinds. performance, inventory the America increased Per

declined mid-single-digits, China. in markets. to Asia-Pacific by POS driven increased growth XX%, all key primarily due

heading elevated at XXXX. above dollars the the levels position year into the As quarter both in improved previously year-end weeks noted, prior first This ending inventory of supply. with year and retail in prior slightly below levels were and

quarter-end billings to continue their retailers retail gross which elevated, second to position. improved, as impact inventories expected is While our remain quarter slightly negatively adjust

from of XXXX declined positive mix points which price The points, negative basis-points XXX several was were a the fixed-cost basis-points XXX of management, lower-volume with program, XXX and savings Adjusted to other basis points, primarily inflation benefit XXX factors points. growth of decline XXX inventory of contributed for offset basis and partly in basis obsolescence gross of primarily carryover sales which These from increases, basis-points. absorption XXX XXX the and optimizing closeout XX% margin impact quarter. had and associated the actions, cost factors due factors, by to basis

$XX due a million to to P&L, partly decline in X% for advertising year-ago. positive compared POS $XX optimizing growth offset quarter. lower Adjusted by increases a margin. primarily the The X% operating negative adjusted pay lower savings due was the supporting expenses gross down million, Moving increased related market was the sales to growth increased to $XXX a program. and $XX to income million, from million, Adjusted SG&A

by offset declined use to prior a of year. EBITDA of the operations $XXX requirements. to earnings, The million from the of $XXX use $XX was working to a the Cash Adjusted compared due business, $XXX increased by the same lower was cash net a use seasonality reduced capital partly in factors. negative million impacted reflecting million million, by of

Capital first million year-ago expenditures of was to and were free-cash of $XXX use a in million million, million, flow quarter a XXXX. a the compared compared to $XX $XXX $XX of use

With $XX basis, and we million in On of strong In resumed which in expenditures, a and primarily compared generated million. $XXX position increased repurchases due repurchases. positive trailing the decline we quarter, continue financial million $XXX flow, free million the million our confidence outlook, shares capital to have XX-month The repurchased prior year. $XX $XXX share to free-cash cash first look in in a to XXXX. was to our flow, we

last decline sheet, we The at reflects XX-months. to quarter cash balance to the prior in shares, to million million, $X,XXX a use debt $X,XXX of flow million debt Taking debt million with free-cash the million of last the repurchase in the offset trailing balance of and over Total year. compared cash generated reflecting from the the the repayment quarter look $XXX $XXX year. $XXX of a reduce finished mostly year fourth by declined

$XXX $XXX from the down receivable line achieve as improvements decline we $XXX have the prior million was sales. in million million, Accounts year Inventory declined to sequential to of by in $XXX year-over-year levels. continued million in slightly with

of the will is XXXX, Looking to Leverage flow ahead, our to free we increase believe which the generation. at to inventory primarily cash timing first X.X The of due in year-ago. increased quarter, times reductions ratio compared the to contribute times results. a quarterly end X.X we achieve to are well-positioned

X.X approximately expect We of XXXX to ratio end with leverage a times.

XXXX. generated launched growth savings the $XX as of for in we million execute optimizing to quarter in We program the continue

As our previously And million confident program goal we $XXX XXXX. by announced, target. are achieve that we saving's to will raised that we

XXXX. $XXX in to estimate. We cash expect total incremental program expect implement savings million our $XX estimated the of to We million, slight $XXX be increase million now a from expenditures prior to

expectation with $X.XX $XXX This of free-cash net comparable consistent $XXX million. EBITDA $XXX for includes February full-year to constant guidance our for of currency, our EPS million year We the XXXX adjusted range are exceed to flow $X.XX, Investor reiterating in last presentation. sales our million and adjusted to to be in to

billings the second-half historical of by trends. negatively retailers In quarter in be continuing impacted and inventory terms phasing, we manage shipments expect in to second their gross to the for to revert to

This wrap rate, decline accelerated will QX growth result in year. in in the we particularly an inventory atypical an as prior

environment volatility, operating volatility may any and challenging are macroeconomic considers subject risks aware with other today, what is consumer demand. in a to the higher We impact The but and company that disruption unexpected macroeconomic market further uncertainties. guidance of remains

guidance. market-share growth and good off start believe overall we're gains to our our demand well-positioned full-year with a closing, to are consumer product In in we and for achieve

to turn now it And will the operator. I over

Operator

from Drew the of question [Operator line Stifel. Instructions] comes from first Crum Your

open. Your line is

Drew Crum

Hey Thanks. afternoon. guys, good Okay.

Anthony. So,

I retail inventory is And sales excess this follow-up. that what working save tracking I to then the earlier absorbed was growth recognized the of remains? business points suggested in you three How or of of during a year, much have through and that year. XQ to would four think, that from How target?

Anthony DiSilvestro

Okay.

That the are on and below that's the that in into our year and year, reductions by to both said elevated the ended And first-half. We we elevated. they a fourth right? end of end this retail year contact, situation weeks of believe we will in inventories prior slightly on we to continue that QX inventory supply, call, dollars and in but with head the were and will with situation retail just track quarter little by second we will the more be levels are improved prior at as generally inventory end And respect of retailers still QX believe bit above first-half. So be levels quarter and as adjust XXXX. for position corrected the corrected

Drew Crum

space Richard, or then guys maybe if only back the rather everything relaunched are shelf comment for And cannibalization your added legacy High you've you one existing can and now for But you've or together? Frozen. Disney on finding you Ynon in. Thanks. quarter there's I Monster brands, that or of Are know that and Princess can coexist doll launched allocation you

Ynon Kreiz

doll really management for a to brands flat allows Yes. in I'll each brands comparison, each competitors. lot the have a brands about start, a first in amount particularly very up category, of themselves in well unique we're allocation, but of and reason one on being. of the competitive talked mentioned, our of the our it category one our within generally portfolio, have significant space as seen you our structure well. the held very category up We've which have held POS in a from discounting context differentiation Barbie on

is very this answer doll. doll we strongest portfolio said the But as overall, as feel arguably year our of back the is half confident the space, industry of Mattel, and and terms in just I've move history simply to of often we the the the into the in certainly question in

Anthony DiSilvestro

And comment Drew, like-for-like basis, more obviously a capacity did a have for but we is flat Monster just High Disney we -- add and the to Princess. on do

So they there have system. brands these in was whatever no with cannibalization between the and

Drew Crum

it. Got

Okay. Thanks guys.

Operator

the line Your comes from Arpine Kocharyan UBS. next from question

open. is line Your

Arpine Kocharyan

last you're follow-up. I Arpine. have up was reported wondering bit wondering fell then afternoon. And earlier and could thank is this demand a for versus I is that because you globally share, POS was the mid-single-digit This Easter year. April much. year if very a I adjusted quick Easter, seeing Good you your actually you maybe what Hi, patterns into if little

Anthony DiSilvestro

Arpine. hi, Yes,

best including QX up think right? the obviously, think about look at So, it. best at in when positive, we're the look that's into also April, to way way POS April, and I you are think to year-to-date, early we I

Arpine Kocharyan

QX down something? the could XX%, and net still hold? helpful. Perfect. said right still XX%. so, expectation? the year, XX% backup that I about in the that it And had then XX%, XX% very XX% the to in mid-teens first-half I you the sales way? then still maybe about -- earlier No, If And that that's Thank am would Are cadence you imply or to the you. second-half. thinking Is think Does that in that return

Ynon Kreiz

Yes, very much.

So average, first-half, did first-half the second-half decade, XX% you into second-half if in causing that's on really the what's XXXX, we the the growth this leading we the look that variances. XX% at in and and about one-third where the in in do second-half and XXXX was two-thirds we're wrapping and and in first-half anomaly

Arpine Kocharyan

question, push obviously about I opinions consumer particularly Barbie, apologize because but retail in of, touch and toy that And could this, in are consumer on maybe, each kind brands Anything How out think of think I'm terms mix for lot the on you royalty the we of products could us rate? a Okay, for you I power then, give light of color making here you if the some economics there's sort the film you. of, of up. you share, should there. can. coming Kind could third a of with big at aisle, sure I'm okay. outside you product some Thank hoping of for your participating

third-party recently. us think share you Maybe, example be you example will rate that to you opportunity was announced just be earn on Thank on anything royalty that this give not able revenue, announcing, Gap you to obviously about -- could those might that of you. but those help

Ynon Kreiz

in particularly going making legacy Barbie year a be XXXX Yes, to is on brand. the First-off. particular

drive it there, the is toy brand we've we our incredible ever unscripted extensions in conversation. a film scripted and as first catalyst live all television. accelerated this We've seen aisle action presence gotten of the also shared. From of to have meaningful cultural As outside has

experiences We that world. have place the taking all live now over are

mentioned hearing to broaden consumer about but has extend the gaming weeks outside drive extensions in aisle. partnerships and investment the some value going of of give meaningful as our partnerships opportunity movie significant and gaming content also unlocking hearing much It that the the is lot as recently, product thesis really and Mobile around We've collectibles toy revenue, Digital the expanded. monetize franchise product a course, of to the the you're brand be and and for you'll reach, digital and shared consumer you in a the of of coming the more be partnerships. to us really more our future. IP impact of us a and catalyst

Anthony DiSilvestro

of terms are opportunities, all these accretion, mentioned opportunities margin licensing accretive so accretive. Richard are margin In that or CP the all

Arpine Kocharyan

much. very you Thank

Operator

comes next Your Handler the of question from MKM. from Eric line Roth

open. Your line is

Eric Handler

years, the Thank you. Anthony, Good Thank questions, appreciate you we look, expected far, the what very I than back half, I be which Two quarters, XQ, everyone. bigger? for fourth hockey-stick given the much larger quarter, as XQ some to of look but but is XQ. you know the growth of, directionally do big, is years larger the in afternoon, looking at those question. than cadence expect for you year, for some as first, you've we're sort XQ so a

Anthony DiSilvestro

Yes.

points. a think of couple I

to accelerated QX First And half. year-ago the patterns, certainly to historical even double-digit prior that's is as shipments in dependent billings two-thirds that right, POS in in in is year, gross start rate progressed as simply to an you'll billings it's atypical POS, important the revert rate and growth in you because we so And QX not in we by I that think to stable to gross we on QX do is assume expect in said, that billings, what if growth get historical gross the in for increase you'll comps, ease through see with particularly patterns. a right? seasonal in as we the shipping QX accelerated the those returning growth, second-half wrap accelerated and back than note more year,

Eric Handler

in I Richard, remain towards Wheels how like feel good low it anything every Hot that that really you But items again I'll seen I is strong. just to you why had? this growth one point for environment, Hot guess for look so to is right. at up retail asking you've wheels, or got When Wheels extensions quarter, you've of, the price All hot well. product that that. I'm of Is so the function Okay. a follow about there you've perform could, it continues sort

Richard Dickson

innovation is follows be in to all-encompassing vehicle's product market-share for growth strategy of the is part the die-cast which that brand, it's the the relevance, mean primarily brand's continues important Mattel the driven playbook. thanks Well, really seeing category. kind in I we're Hot been question. innovation, by of of There the Truthfully, incredible an of it. XXX really We And cultural driven across results vehicles. by the Wheels narrative. over basis-points gained a specifically,

of And been our led our in year. year biggest the six heading obviously that's by fifth to consecutive ever consecutive Wheels. Hot We're power record

is continue Wheels primarily also entries our adult innovation distribution engine XXXX, is of expand momentum. year to the which two And last to Wheels We've and been been both launched We I core itself. Hot mentioned, as specific RC We've Hot the collectors, growth the aggressively. and kids have successful Skate, Wheels core brand both strategy. gaining in within in Hot a targeting segments vehicles die-cast growth

into more fall. expanding this even We're be additional play patterns to going

between and relevance. great that's can't We new growth driving all-in-all, be excited demand excitement Wheels the creation, effective Brand. look So about our innovation segmentation very more for ahead that's the Hot cultural and

Anthony DiSilvestro

also And to Wheels Mission movies two Gun have for Abrams the in and Impossible one at the remind Brothers Skydance, just J.J. Matchbox we with of produce that series. and development, Top to Hot you producer Warner Eric, with

expect Richard exciting for us. this more So as in said, very space category,

Eric Handler

Thank you.

Operator

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

is line open. Your

Gerrick Johnson

of, flattish. to does I looked that you. When would technical much sales retail the question sort But Thank Anthony, on of allowances. thought Hey have hit? clearing pretty a Great. inventories. those

So basis-points what is it XXX impacts that accounting-wise? breakdown gross margin

Anthony DiSilvestro

right. you're mean, I Gerrick. Sure, Yes.

of margin obsolescence, as our our go seeing is the impact sales obviously adjustments through were prior as comparable where on we're well fairly which sales, adjustments, through gross but neither gross the impact QX margin. to sales year, closeout Our

Gerrick Johnson

an Okay. growth, a where or The interpret ways And or strength maybe Richard for to POS as area more seeing two closeouts. there's Steve. you're that, either

So were I closeouts? POS just is where in areas areas that strength in where some we're a seeing Hot clearing But are where of is POS lot some strength understand Wheels. other and that

Richard Dickson

Well, and billings our overall, continued that and April. we've demand programs. quarter will in the with positive, second that including for we be forward situations. expect that, reiterating POS said, momentum, early some and inventory by end retail into our their in retailers the move negatively to impacted was certainly the expectation gross corrected start inventory see the great But of first be the in product and of back consumer And both quarter results we'll in we the continue the to first-half. only products the to enter continuing course our as by half. as will guidance, accelerate we're context we The year-to-date, is And certainly, full-year as second-half,

Ynon Kreiz

discounting we Yes. look vary consumer the And we look is when seeing, increase significant are Obviously, fixed dollars the consistent. just But to takeaway, aggregate, that add or scan aggregate of at Richard's when level any at in category. could in change by to dollars, overall. we relatively point, not

Gerrick Johnson

that and what maybe Well, other, sets growth? In building POS let drove schemes Okay. more. me figures, add action

Richard Dickson

driven action World. Dura’s A lot that of figures, was primarily by

Gerrick Johnson

thank Alright, very you much. Okay.

Richard Dickson

Okay.

Gerrick Johnson

Sorry, go ahead, Richard.

Richard Dickson

by that and comment. momentum that and the particular kind into categories, to gain extensions Mega with at Challenger I in say, the as continues Barbie led driven we've sort the with of construction been of but category going was Hot to Pokemon we Wheels Anthony, look well, has figure reiterated action as

Gerrick Johnson

guys. Thanks Great. Noted.

Ynon Kreiz

Thanks, Gerrick.

Operator

the comes Linda Your question D.A. Bolton-Weiser Davidson. from from of next line

open. is line Your

Linda Bolton-Weiser

international decline of so strong conference. ended the at Anthony, Thank I was being higher than said March higher revenue something know curious even the quarter? in like than it you. but end the then say something Because U.S. shipments towards you the particularly being up much sorry you if this, being I you about the that secondly, earlier about was And in I growth think why POS missed did

was of the last shipments. strong you. terms of March So really it X were that Thank weeks in

Anthony DiSilvestro

Yes.

of our It end we the shipments So in I'll shift a at right, quarter. supply with chain between terms it's impact the to very QX question. and second of Relative our start performed able in incremental to part expectations of And the well. outlook QX. were March, the sales. doesn't We full-year the really fulfill just provided

low-double-digits, other regions, America of to terms we I the important a the when also But were gained strong industry our while Latin question question, of terms we think recognize of outpaced is EMEA And across POS, your low-double-digits. North part In America was North it's they look think POS. had in I actually around America, was that flat. the up and share. up

Linda Bolton-Weiser

Thank you. Okay.

Operator

of Stephen question next from from Sachs. the Your Goldman line Laszczyk comes

Your line is open.

Stephen Laszczyk

this that year? cost half this Maybe as absorption be in both normalize remind headwind an what of degree thanks. could year And business the great, Hey, into fixed is XXXX. degree patterns to expected to for Anthony. Could a you us back maybe opportunity what be and to

Anthony DiSilvestro

Yes.

outlook. context that of answer the in margin me Let gross the full-year

our We've lower fixed target well our volumes. impact the that the on XX%, pricing, We for those the offset, the planned under drivers impact as to side, production two increased And cost associated for absorption expect gross to optimizing are year. as XXXX cost margin growth savings. last carryover primarily and positive right, XX.X% that's of And compared key program. partly improve by to with actions

margin We XXXX. are having gross a onetime on reduce and in impact owned is levels, inventory negative targeting to that our

expectation, our management offset also upside our than that on guidance. neutral but there in costs. we should original And be your be inventory of to higher better XXXX factor. And full-year cost by point, to that's XXXX in inflation, now a terms So expect to inflation that's little being cost

Stephen Laszczyk

it. Got helpful. buybacks. And on then That's just

the investors You quarter. that was repurchased the year? the opportunity million up balance first wondering that ramp should maybe in Or of something stock to into quarterly half $XX the expect as buybacks pace I forward? is back going delevers in the if sheet

Anthony DiSilvestro

so a years, flow, program. the bought We're to stock. and financial the And be position in is we share first really to the free resume ability outlook. position buyback our to of our nine our very in generate in reflection cash That's own happy our confidence time

terms In repurchases ahead, XXXX. make to looking expect we in further of do

given being That said, current specific $XXX under haven’t We guidance. million we have authorization. our remaining

Stephen Laszczyk

Great. you. Thank

Operator

line Jason comes question of next Bank Your from of from Haas the America.

line open. Your is

Jason Haas

and my afternoon questions. good thanks taking for Hey,

the curious, year-to-year? plan? for above. POS that So of did your what expecting with called you mid-single the up Or just growth one, come first the in out initial I'm remainder are it line then XQ, digits. the in you And in on in was POS

Anthony DiSilvestro

with the in our one-time impact guidance, the we full-year full-year expecting points. correction POS Yes. X inventory retail negative we of X that's performance. had related to to the are guidance, our Starting context In positive

say in that's So first market of in track share. gained we're I quarter. We there. and would outpaced the industry on the kind

So off start. a good to

Jason Haas

for for now? to thank management headwind that we inventory And margin, we headwind Okay, then should Anthony to continue are -- on also this or XQ? past gross is see Or expected you. inventory is to that you the another clearance in

Anthony DiSilvestro

had I negative note in but we XXXX. QX. And the QX, going just we're that than that costs to to in less we certainly level think some in headwind, we'll right, saw see important wrap

we So get guide it when should of half. back good to be a margin the

Jason Haas

you. Thank Makes sense.

Anthony DiSilvestro

You’re welcome.

Operator

question the Fred Wightman line Wolfe Research. final comes Your from from of

open. line is Your

Fred Wightman

XX% just were wanted in the back Barbie. if I quarter. down bookings quarter, XX%, Hey, look we guys. to down to the come at last they mean I

upcoming Do digits. make the the was said the high you is POS to you not? launch single well think of most or feel like quarter movie brand positioned I down this

Richard Dickson

and confident about we Barbie's Look, future. incredibly are excited

by we We in dynamic quarter are, a obviously, impacted in the elevated inventory. were current where retail first

the better where portfolio dollars leading gain the in It's points important back of a as momentum also in share gained our and basis grow the the much QX, second of aligns compared moved theatrical a better of movie. that really you release which remind to also going XXX the performance, the is and of confident that continue quarter, the recognize shift promotional expecting quarter. which full-year. activity are we're has In to we with to in in market We portfolio, into half the we're be QX, industry to first to we continues part Barbie

and importance consumer as The the we conversation is both extension We've around well, Barbie core lined pursue well. got young of that's the have collector cultural strategy innovation only in as the we extraordinary the adults that highlighting age always for as and back up half. our the as brand

more lot about the behind half, brand's you as and the brand, So confident see will be couldn't into certainly excited we there's Barbie and energy more move a that the future. back we

Fred Wightman

And to expecting the the in has still just for flat you outlook to Or POS industry year, positive? then slightly changed? that your be are embedded

Ynon Kreiz

industry flat No believe our toy estimate Yes. industry. slightly up. the change the a is to regarding We growth industry in

macroeconomic industry some the there's to challenging while movies by to will flat eight the resilience We remaining other during cultural times. grow play expect Industry including movie, it significant having families. still consistency, impact with challenges more and continue over XXXX We're time. believe in consumers growth for toric led life we now, will has children slightly that economic movies Barbie a a well. consistent the decade of part also toys but and than up. shown And as facing industry for and alone, seeing be seeing We're

Fred Wightman

Perfect. Thank you.

Operator

This concludes Ynon Kreiz, our and turn Chairman you. over session. to I back question-and-answer Mr. the call Officer, Executive Chief

Ynon Kreiz

management you, fundamentals for while and strong. thank results, the business and operator, you, inventory performed underlying Thank your summary, our impacted are retail In the first questions. well, quarter's everyone,

to we for full-year full-year consumer market positive industry, will and achieve share the demand be expect outpace our guidance. the that gain We

and CEO today a time Mattel. high-performing Mattel this together. opportunities for with like organization of for It many great team to more to doing IP-driven, privilege our during talented together ahead would a the thank as the work On continues company an toy transform to look I note, to I call and entire anniversary call to into coincides be fifth global the company. Thank personal today. things for my working forward such again with a you joining

over now turn I'll to the call And back Dave.

David Zbojniewicz

of corporate will this found participating in congratulations Events webcast five-year p.m. can The for Presentations joining webcast today. via call be in the available you, Thank be X:XX you link Time and section call. Ynon, for Eastern website, Investors call of Thank our your our at today's A corporate.mattel.com. and on the section replay everyone Thank of beginning anniversary. today. you

Operator

call. today's concludes This

Difficulty] may You [Technical now

Mattel (MAT) 26 Apr 232023 Q1 Earnings call transcript