MAT - Earnings call transcript Q3 2024

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Operator

Thank you for standing by, and welcome to the Mattel, Inc.

Third Quarter 2024 Earnings Conference Call. [Operator Instructions]

I'd now like to turn the call over to Jen Kettnich, Vice President of Investor Relations.

You may begin.

Unknown Executive

good and operator, you, afternoon, everyone. Thank

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

Quarter know, financial you this we Mattel's As afternoon, results. Third reported XXXX

our today's call provide and commentary we We will results, for with which, questions. begin after time Anthony Ynon providing on some will

Please key billings presentation and are defined which referenced release earnings reference and discussion, call stated indicators, release presentation may will gross certain in unless the performance slide note non-GAAP on this Today's constant slide financial figures stated earnings appendices. measures that and be in otherwise. currency

earnings financial section non-GAAP information of measures information regarding as Our Regulation performance the can Investors website, and corporate by the and well is documents. corporate.mattel.com, as through slide those release, key included in our information our presentation non-GAAP be indicators regarding supplemental required accessed G

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

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

our the our time these as make release disclaims most to update public law. We we Form XX-Q forward-looking as uncertainties Mattel describe statements. any with does of other expressly presentation report, and the report, and other except annual so, in as in by quarterly latest latest from required and do well filings to Form time slide Risk XX-K section of not obligation SEC recent Factors some statements our earnings

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

Ynon Kreiz

you Thank joining Mattel's Earnings Call. for Third XXXX Quarter

IP-driven The This quarter, was from and Mattel's gross expand we the which year, that comp continue movie. of the into of line strategy entertainment would tough this a quarter, grow in through Barbie toy comp there to offering. our prior execute we multiyear we quarter always to relative to our performance. benefited fully the the highlight bottom margin offset knew strong Coming the be success business our

months. our Our gross the generate margin significantly XX with balance sheet this flow. to and up trailing was is free year line and in strong grow to priorities in flow continued cash strengthen This profitability, expand cash

improved constant increased at to declined X% metrics margin points Looking to EBITDA XX.X%. to as sales Net ago grew quarter. Adjusted X% reported year million financial gross EPS basis the in to and X% XXX key adjusted Adjusted $XXX and $X.XX. compared currency. X%

X strong of flow shares same now further expect year capital cash the ago. the and period to months share a allocation to months the million $XXX have the improved line by compared our Supported $XXX million Free nearly make repurchased of XX% trailing priorities. in to in our year sheet, repurchases XX through with balance first we

anticipate where year. our year, Given to we comparable slightly now are in net the to be sales full down for we where the

and full EPS on margin by adjusted to EBITDA track fourth year our We in performance. strong the expect are growth driven quarter guidance and achieve gross

impacted comparisons success billings gross by quarter Barbie performance movie the expected to third were category prior Dolls' compared with ago year. of year in the the quarter. at by down the as Looking as

Vehicles ski and Dolls the adult Within very continued we collector performance expansions. as by core segments Monster portfolio, grow expand to High the strong, was innovation new Wheels' led diecast franchise. in Hot

fan One and is Wheels experiences. licensing on multiyear Hot its announced we a its recently and expanding includes range stated consecutive with and partnership Infant, certain that Baby positioned Wheels strategy. products Preschool for well Power a record track base, with Hot of is broad we seventh growth. Wheels, in and as exit year in long-term Gear lines and for is product Toddler line declined our Formula

grew grew globally. consecutive wood expand line Circana. driven quarter, Uno gained part the as new of share categories forms early of its year-to-date, and for quarter in play. second on Mattel's Price the Vehicles and achieving declined we total Fisher we record collectively Dolls, per though with Challenger success we drive as market in slightly by largest the Games innovation

the Looking in quarter share we ahead, to market expect year. fourth gain and full

We our are progress also making further entertainment with strategy.

of Apple last that was live Vew-Master have worldwide action with a and we Universe Studios Cena. will action X, the MGM recent movie will June week, and Escape artists. movie and Matchbox preproduction The greenlit Sony John with release Entertainment codeveloped announced movie original are for Skydance Pictures action be In star Masters the live films with started And with just Here live Amazon scheduled highlights. XXXX. some the theatrical film,

to World million Netflix to fans. franchise relaunched across joint month of ranked billings grow Barney's exceed gross we XX the Wheels' with to countries top In generation a venture Race gaming, And as a digital $XXX year. related is NetEase continued our was MattelXXX, as platform. new in week in premiered for this Hot last X and expected Max on Animated Season series Let's television, and TV XX last Series the In

the contributed quarter the million to net $XX year-to-date. Our and in JV income XX% $X interest in over million

anticipated the low industry is continued and modestly in prior perform the a year. heading in period As down it unchanged. our in to first first as expectation relates to XXXX digit into toy months it industry, to this compared the year, decline it same The X better was single than the to for

we over The term. this trends part further lever. and a year, fundamentals to continue consumers' toys the strategic category are that prioritize will strong, industry important long improve return and will as the of believe to are lives retailers an growth and Beyond the grow

is lineup a and offerings across points Mattel of innovative quarter positioned with with fourth price patterns competitively broad-based portfolio. segment product range well play in launches and the a of our

We Moana of of in theatrical also an Universal's lineup releases Weekend X the exciting tied movie have product Disney's November. to and

promotions for prior more season holiday year. good major compared to shelf greater a additional catalogs and expect representation holiday with retail support, marketing space, Mattel and as the increased across We

this gross margin generation. expansion prioritizing multiyear profitability, we and closing, year are In continue cash our execute and to on strategy

expect are good growth market growth toyetic quarter, share positioned holiday We gains driven value slate and in top shareholder fourth and line creation. a long-term for theatrical well the by and a season

And now I turn will over the call Anthony. to

Anthony DiSilvestro

of profitability movie benefits as Thanks, was the prior constant to significant of decline $X.XX fully of billion, or in impact sales X% year. movie Ynon. We related quarter which the gains comparison, strong margin the in reported the X% due a the Barbie primarily with another offsetting decline wrapping Barbie prior achieved benefited currency. year. Net were The

the EPS fewer decline shares increased of and $XXX basis cost result margin at as comparable reached benefiting offset from to as sales from chain an by million share income savings. benefiting X% $X.XX, operating XXX of increase points, outstanding improvements gross net improvement. Adjusted was Adjusted a supply XX.X%, repurchases. was Adjusted margin

gross to in gross in by billings first, Turning constant X% Overall, billings the category. currency, declined quarter.

was benefit in digits. and Dolls. XX% single declined in XX% would months declined due and low double decline down primarily gross digits. the Dolls double digits quarter low through related Barbie first and gross declined have movie-related digits year, POS gross Barbie declined declined to low Excluding POS POS last in QX the billings X billings the the high of billings increased modestly. single

Vehicles RC increased expand product exit X% gains down in digits Hot business overall, digits. grew we lines had content. primarily The as an POS Cars Vehicles Growth mid-single growing Let's partly to with Games Price mid-single Action Toddler also Race and declined aggregate achieved X% and the declined low which streaming by Baby POS segments, Wheels sets certain The Wheels, digits. and building Wood those cars Category Hot Power from Figures Infant, quarter, in in to also categories markets. as X%. and by Fisher growth to by in Wheels double-digit Gear while contributed with by double outstanding category distribution growth Fisher-Price supported Uno. due Preschool Challenger and Matchbox Disney growth. we diecast grew, was offset driven benefited XX%. more driven declined.

X% Turning region. comparison. to by North primarily the due billings America move-related gross declined Barbie to

digits. also digits. largest movie-related Latin The single digits. achieved by quarter. impacted the EMEA gains comparison. markets, the declined other grew high Mexico POS POS our single POS X%, and X by and Fisher-Price and in high X% declined brands, in Brazil. power growth declined driven single America high Wheels declined

growing had for in a Pacific to holiday driven high digits. prior the year, increased gains levels Asia quarter quarter, Japan. ended digits we the inventory India and and well strong the single Retail low compared POS single by down are positioned X%, season.

added efficiencies, increased driven fixed points absorption, XXX we margin XXX XX.X%. Program generate basis basis the gross added factors. Profitable basis Growth to was cost Supply cost XX several points, as for Adjusted including Optimizing savings. continue by chain points to improvement The

mix gains Barbie and basis XX XXX of the impact cost These basis accretive offset as wrap exchange XX negative points Foreign rate were we movements basis the movie. added with a associated partly benefits deflation margin by contributed points points.

reflects operating to later from at increased expenses Adjusted for Advertising by by program. lower of period. versus optimizing to of the or versus an XXX and points reduction gross X%, The adjusted driven compensation sales months growth $XX offset shift primarily million expansion XXXX basis first P&L. adjusted was higher was our and income Moving profitable lower offset margin operating advertising. the prior year. million, expansion income savings for XX% or year. prior by partly strategy year net SG&A Adjusted to X Adjusted to down SG&A XX.X%, comparable higher the the advertising the million $XX in with margin expense declined $XXX

increased the the in million, improvement. benefited the to share to from The use X% of to compared year was cash $XX increase million count, quarter of was Year-to-date, X%. margin increase of activity. from $X.XX from share $XXX in EPS our reflecting lower continuing EBITDA repurchase prior $X.XX, compared use third operations a previously $XX period. mentioned Adjusted benefiting Adjusted million an a a

by that driven free year. replace will new serve of our acquisition property the Capital in of million facility. by $XX and current a of resulted use $XXX flow center million cash as leased of a prior global design expenditures the compared to $XXX This use a primarily increased million, in our

by driven free flow XX-month flow was basis, capital partly to from the was increased higher year million, from we free line XX% shares. capital $XXX trailing operations of cash by In The portion of a priorities, utilized period. repurchase expenditures. increase with have On cash cash offset our an allocation prior a improvement

X months During And of trailing XX-month the during million. XXXX, $XXX we now first shares. million repurchased repurchased $XXX the period, we have of

months, to Accounts with primarily use past partly million quarter balance until increase the the receivable scheduled was a cash Total of due billion XXXX. million of sales. the debt million, sheet. by last of repurchase free versus year, to We flow $XXX lower the increase an to $XX year. the finished cash with reflects comparable the shares. $XXX no $X.XX declined to offset maturities over Turning XX The balance of cash generated prior

ended remained $XX below levels quarter down the at as we Inventory year $XXX prior million. the million,

prior increase continued trailing XX-month Debt prior at Our adjusted was improve quarter. in the ratio X.Xx the to to adjusted The the EBITDA quarter EBITDA. the compared year improvement finished in year. X.Xx our driven by to leverage to compared

in Growth savings this We $XX Optimizing commenced quarter SG&A. sold with $XX and million $X cost significant for achieving we we the had generated of of of another million savings in goods year, Program, benefiting Profitable million which cost quarter, under our

million For we the period, $XX X-month savings. of achieved

total $XXX our Given million on million million program savings of exceeding achieve savings expect track the XXXX. of to $XX progress to date, original now generate are of in $XX target XXXX, and approximately we by to

closer we year, our end the of for XXXX. we As updating the guidance to draw are

and expect Wheels and sales We comparable, From constant for to outlook Infant, decline. remainder respect the results year-to-date the power we of expect full currency grow movie Toddler year. year, slightly be to in category be With as and we for we to to perspective comparable down, to and categories and Vehicles brands, Dolls grow, benefit. wrap and Hot to the Preschool decline a the to the net given to expect Challenger Fisher-Price Barbie our

in adjusted growth XXXX. to fourth good expected improved reflects versus compared relatively stable The to as margin This holiday to is top for XX% adjusted remain XXXX outlook increase to and slightly to XX.X% anticipate net quarter percent the supply reflects performance. gross our as expectation line and guidance improved SG&A sales approximately expected Full increase continue a season. cost we year is net chain savings a to Advertising incremental a of XXXX. of sales in as percent now

be Free of $XXX to global flow $XXX EBITDA to expenditures of a to for range The to design $XXX $XXX XX% Capital the projected forecasted to million are be double be the is the leased still range to the recent to replace facility. to billion $X.XXX to is purchase which million EPS expect $X.XX to of adjusted approximately expected We range to XX%. continue to our adjusted be grow rate center $X.XX. million. in in by digits of adjusted cash million tax and includes current

We will quarter guidance our provide on year call. full XXXX fourth XXXX

guidance the macroeconomic to The uncertainties. remain risks of further and aware what today, is considers but volatility company and disruption other any subject unexpected and market

XX-month and We generated expansion closing, strengthened was trailing in adjusted gross margin cash flow a In further comparison. additional achieving of balance repurchased highlight EPS growth and significant the shares. despite on the our challenging in quarter sheet meaningful a basis,

to in offering value. a and our strong continue shareholder create position our and long-term expand to our are multiyear strategy IP-driven We business toy executing grow entertainment

take and And questions. to now operator, to turn happy will over be the your I call the we'll

Operator

comes question Arpine of first from line [Operator Kocharyan the Instructions] from UBS. Your

Arpine Kocharyan

sort I for Jen, consumers election, follow-up. retail then the welcome to the on gives guidance growth quick you Ynon, give the guess, forward where a and have lot you. about quick persistent a could Mattel look with And of concern to holding to, What I up There's you generally from sense into you macro and sit working of environment. inflation QX. tariffs, reiterate QX? a confidence about

Ynon Kreiz

where from in year. expected our growth we initially industry Sure. in continues the fourth and of at than Arpine, sit, products. our quarter see for perform expect better demand toy the start to business the we the

said -- We different is seeing. recently interesting excellent forecast to Retail with Federation studies, the that that also one that is National X.X% other season X.X%, expect sales which generally is seeing grow we're are holiday they line to that between holiday in

quarter for research Our for are plan well-known own shoppers that in for majority and of consumer well toys the shows that internal evergreen looking toy more brands, shop to bodes the fourth which Mattel.

a So all holiday in good all, season. we do expect

gain to expect sorry, We sales, share strategy. and our -- to grow continue execute gross shares market

Arpine Kocharyan

right, is in Wonderful for then maybe of Or something to close outlook given if what retail this QX? right, ahead for were still the implied at QX, QX? And I'm math is it more when much being pressured QX, why is tougher I margin conservative this in bit Barbie you? look given driving closer is proceeds, margin for to, Is mistaken, But margin if the Anthony, you margins not XX.X%, that, you XX%. my is in comps are like sort of it so Anthony. a think, of

Anthony DiSilvestro

Sure, Arpine.

year-to-date. said, One XX% a we're and on a seen that. slightly, points. reasons year does we've the we year couple XXX to cost full deflation to it that's As up is there's for basis go imply And and down -- of guiding

we're go. have bit see some to last also wrap. so wrap of in quarter expect benefit of cost quarter. We movie of of continuing a About fourth occurred the the a little have the X/X inflation to little in fourth bit we year's And to

So X the those are drivers.

our fourth actually On income which quarter. basis, well. is as comparable is of year-to-date average shift advertising operating QX, in advertising we're percent increase in the $XX and pricing driver in as other significant margin our reflects the to margin sales, pretty terms a strategy million, for a into to guiding a implies The impacting down which really of it net be

Operator

the from Alexander Your Morgan line next from question of comes Megan Stanley.

Megan Alexander

start, last said in you out actually single some think the Gross said last you X%. currency And you is, think POS to think have down billings I would digits, was were I wrong. wanted they modestly wasn't same down the if in I increased single high digits take And movie-related Anthony, if constant toy, think, the down which which me quarter. impact retail high year, were I I'm that inventories were of correct as I also but quarter.

understand POS X% billings imply The can So singles third high gross you just down in us -- together? all that works how would you that the quarter? overshipped POS help those down

Anthony DiSilvestro

Yes.

our mean inventory gross POS point and there's gross typically an billings retail and to I year-to-date exact volatility a fairly billing correlation So not I you POS look, is aligned. and between basis, slightly movements would on and the is in some are what down both science.

retailer importantly, we digits look high they good year. as the the we QX, I and head are positions are into end also single at think we very well at inventory we the They versus believe season. holiday of as quality, a positioned are last down

Megan Alexander

helpful. And guide, line That's the on Okay. the top then change. just

saying don't slightly think gain you you're still down. your to you share. said changed I industry, expectations you for expect comparable and Now the to

that's you you And expect us change no you ahead to total can of you positive changed? ship expect Or in POS the just do quarter? longer be help your market the what So understand to expectation? case, I Did share guess fourth do if POS?

Anthony DiSilvestro

in outlook of note, would It's And based the fourth a expect results Yes. specific an season. good to drivers no and year. say our year-to-date grow out. expect holiday importantly, of We call for do remainder POS our the we I on there's assessment to to quarter. do the

gain well. but year outpace the the only to expect the full as in be fourth for fourth for our share, the not sales and quarter, up industry We quarter

Operator

line from question Drew Crum from of the comes Stifel. Your next

Andrew Crum

you've what growth Ynon, you driving next endorse Can you in to see a us us What I year? remind the is? are have with the the follow-up. source share continued a 'XX. factors industry market for optimism of And or then rebound

Ynon Kreiz

has And industry to expect at the better expected first all, to initially full the although start continues toy we Well, industry. of the past Drew. it year, for it grown of the perform the a than of Thanks, It years. still growth modestly XX is decline XX year. in

and return consumers' still Beyond We strong term. this will to retailers important strategic that part category we a time fundamentals will more. worth they improve industry basket long growth in lives, over basket in of before, see we have store, do grow vast or drive said are traffic prioritize year, to they and the and the the that spend lever believe, the trends as continue as bigger shoppers more a typically store industry an is the toys to or the

has Over been time, birth industry The in been has outpacing toy driven. and growth decline POS growing rates.

you the we're coming at by top driven big -- that or If are online. overall industry and been units. theatrical for the both look the in also has markets positive the seeing toyetic more pricing movies drivers -- key theatrical And

adult not positive, you just You're healthy it's but seeing segment all, collector a fast-growing all good have toys. -- adult in been fundamentals. buying And

on that, growth. Within are all future very that well we we positioned to believe of capitalize industry

product, to in gain invest and continue organic demand chain, focus We on supply continue creation capabilities share. and innovation, the expect capabilities, industry to outpace to growth commercial great

Andrew Crum

And I way, We've cash want today, you're puts heard curious working just partners working in that risk year. major your that, I their if any if that payment any flow for the at free understand your capital? retail for I'm maybe reiterating Got to changed of but in way impacts it. mean, it and guidance terms. shifts just Anthony. capital one And has

Anthony DiSilvestro

$XXX expenditures. cash guide mean we about No, bit talked continue in free to I no us. capital impact despite we flow million on little of uptick a of to the

Operator

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

Stephen Laszczyk

on Anthony Maybe first for CapEx.

$XXX any You little proxy then the is that CapEx, of Center. from you the the bit million, a about the you're and sizing more Global new to million forward? CapEx longer-term longer-term the called just expecting $XXX perhaps of a out for making good to the Can build? Design And about acquisition investment there related think going you're talk

Anthony DiSilvestro

Yes.

El CapEx our as forward. a not that's purchased going So guide design that said, out And center on as Segundo facility It little existing up we the next year. update reason we what for little will by here bit, the serve we building spend. for we you related we that it's have El up year. in leased does can And going Segundo build as full an get going amount a replace for rest the We'll manage although global well. as the the closer give a expect year, of bit we an next to as to of in next

Stephen Laszczyk

then repurchases. on Got question just a it. share allocation And maybe broader capital and

balancing $XX a back maybe talk bought in look the just You of pace how seen the X capital over repurchases slower of heading we've we 'XX? priorities year. to the as the what allocation of quarter, the forward, share opportunity first ramp you maybe the than you're other bit year a million back versus about maybe is and the going quarters which into bit Could little into that half

Anthony DiSilvestro

What XX-month our priorities we million in of on million. back allocation that basis, year-to-date last capital we're appropriate And share Sure. in been fund line say total $XXX the those with of back stated with cash and the looking stock really And to terms believe to $XXX resumed and very now a capital flow. ahead, we've allocation about shares. and continue expect since free we it's repurchases front consistent we'll on buy in $XXX million priorities. $XX would with the we pace, bought share active trailing And QX now million would we've brings year, that is repurchase at I

Operator

comes Monness, next of Hardt. line from the Jim from Our Chartier and question Crespi

James Chartier

then internally? gaming What's longer first you of digital launching MattelXXX time planned other any quarter, And have? talk last for kind game casual just you games might schedule term? launch about within frame you the What's there? the the initiatives initiatives about Can some talked your developing

Ynon Kreiz

Jim. Thanks,

physical when that ages. to it comes before, and gaming sustained extend drive digital play all games of world. by said creating we've the to to experiences fans virtual for our is digital the goal As engagement

Our X components: recently about. self strategy started our NetEase with which co-own that joint has publishing, with we to venture NetEase, talk licensing and we

the We third parties. with more continue to licensing where make progress front on work games with we

to gross And brands. see this share our we to starting on be of our digital studio, exceed only to important billings back progress strategy. strong we million a is the with strategy are first gaming comes ramp strength year. $XXX profitability. And to strategy we of when very self mobile and the in expected an happy this we with now. the growth space will space, more and so what on games we the this until we X for that this margins. MattelXXX top publishing, given But us driver, gaming that of is the both is for attractive working And the already it far see released see as as asymmetric opportunities mobile very game line

James Chartier

should Anthony, then inflation? Or then SG&A we there compensation employees driven just is think investing? places growth you're and raises And about merit Great. are where year? by And and how the adding for the

Anthony DiSilvestro

Sure.

information particularly that we of in sales would percent of of areas primary We're investing in SG&A the terms through. investment but digital gaming. the those up slightly. made, we've to drivers our coming technology, decisions as driver the guidance, And primary do some expect be build be that of full a capabilities X is like In to year also

Operator

line from of Horvers question next Christopher the from comes Our JPMorgan.

Christopher Horvers

of a take outlook. at top I'll the sort to change shot in the line

you for fourth quarter different was the you you've about on seen So subtle to prior think guess change to how the taking that the view what year-to-date year as what versus sales, guide about degree a the on thought today? to

Anthony DiSilvestro

Yes.

function So positioned continue terms we at us it's products, said, causing really we we the of we season as in our the activities mean, a in confidence expect quarter looking for the to But space, top as ahead more more year-to-date into demand critical advertising, I the a fourth us. us of creation fourth for those of well in us. we that's little a and as bit holiday shelf good retailer performance quarter. to innovative to things We're be said, cautious more It's give grow a top more line. probably of growth feel of terms of expect Obviously, quarter we line. good us terms in head support, all more

Christopher Horvers

what And in it, popular don't that. my your -- topic Appreciate was your sales in, went experience what think but us. your now versus on help it sales are Can sorry, base are in pretty ever your what thinking with prior? what X are tariff think is us last understanding tariffs. you about follow-up today about China States was and the front in the United how time in List I you from a you about exposure that question remind it. Got how versus just It's manufacturing a right think right of election us

Ynon Kreiz

and always is the exactly is conditions. changing advantage the It's to geographically been this different it's And looking doing to few whether years. dynamics regulatory competitive we've diversified. is we're We chain make countries. flexible in in last our design respond that job over changes, at Well, in can to business. marketplace. products today And responsive a or changes could that our flexibility react impact to Supply policy And Mattel. we market organization X our to for what ensure government have we that different system continue a

Christopher Horvers

of like of sales? directed and And at source how you out do much actually terms So how of I U.S. in just much is that China? guess

Ynon Kreiz

These our is XXXX. made of compared to the of approximately XX%. We've XX% an -- our products XX% about manufacturing. to of that in made This industry China is are of as is average end numbers

heading flexibility system. XX% to diversify talked to also to as U.S. manufacturing continue And been the and in declining footprint has that around further we further The our number across into the about intend the continue product we just over diversify adjust different to more time U.S. China. our We for manufacturing countries. is fact continue in that

Operator

line the Kylie from Cohu comes next of Your from question Jefferies.

Kylie Cohu

little was of that there to Growth you targeted just I really into curious any to for Program. far, could well Is Optimizing a if Profitable change optimize? kind dig I what's was what's next number? going Awesome. million total wondering deeper so $XXX

Anthony DiSilvestro

Sure.

off So of the the $XXX the a million by XXXX, sold targeting SG&A. And at that a year Program we and combination goods start. initiated savings Growth very Optimizing for of of good we're cost Profitable of beginning to

the to expectation that Our and most upside for full million the months through XXXX We coming and of $XX for hit $XX X at initial of line. million. increasing target cost the year $XX XXXX sold are goods million that was year-to-date that from

know, of a have good in and but our very in record to out XXXX goal, identifying you the ability this start one. we're As goal achieving we're and point, strong certainly making cost confident any this that savings at although our $XXX very not track to on achieve changes targeted million we our a

Kylie Cohu

Perfect. And was I wondering a for changes I you me. seeing And about to one there regional wondering if little out was markets, expand but international talked if call there. Obviously, bit you last could were follow-up you're what your in quarter-over-quarter? any

Ynon Kreiz

call specific any about specific Nothing out.

on good a puts business, execute always and whole, takes and to executional There region our we the within very well. focus about but execution excellence. continue be to across continued feel We as going are excellent

Operator

of America. Our line next Alex of Bank from question comes the from Perry

Alexander Perry

a take Can feeling any about inch optimism then it And to around retailers first, on holiday? if touch there's you top how just-in-time are as XQ you your basis? about holiday. closer category like the XQ shift guess, we to can from inventory as talk in shipments a more lot on I saw maybe retailers a seems you of

Anthony DiSilvestro

Sure.

as product They we'll we levels have a in quantity, significantly in for in say, season. are the prioritize sure right among catalog. on more strategic a very a positive. shelf sentiment appropriate, in overall, And And other from coupled very the benefits in them. the season. advertising holiday with is I'd for presence retailer the good plan toys right for key demand make closely right with partners, drives e-commerce, category. we new inventory increase would have that's foot to I that traffic confident part. see our full brick-and-mortar them and space to place and and higher our with holiday It drivers are and We're working holiday we the the planning of slate So products we work say retail We're

Alexander Perry

guess Perfect. your thought Hot outlook sort is in any brands? any going of previously the up change significantly maybe And And did the in down instance? be expectation power power for you expectation Is quarter? fourth come your other for brands, than of more the I then for that the Wheels, Barbie to

Anthony DiSilvestro

the overall in the brands would say I ahead. nor guidance no category so all power Yes, for moving themselves, change

Operator

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

Linda Bolton-Weiser

timing believe that So Walmart. might on Fisher-Price the What's at like your Wood frame expansion ends for been have it's and time an a sounds off I it what's kind good there of like exclusivity more period start. when ramp-up to globally? of line, exclusive the of and time

Ynon Kreiz

product And up globally. we It's now little Linda, second well. are for momentum. to the yes, as a expanding great having period whole in we price a new Walmart, quarter the an is franchises row. exclusive We're adding started with feature people as and with off

it's you strategy, Fisher-Price As leadership, know, brand have believe And a new we #X category. still new for continued positioned growth. in the the very we well is

Linda Bolton-Weiser

where their that to that also companies with brands are their market. makers Hasbro outsourcing you of other -- ask the sort toy that about somehow fragments marketing more Does Can retailer. to Hasbro's has to the when Hasbro? dealing benefit I among brand more changed approach they're retailers? you're supplying Because portfolio of

in So their undertaking? does that somehow is what that they're of strategy terms benefit you

Ynon Kreiz

focus grow of our we the we competitive in the When to comes advantage, do supply see have the believe a it it's our we to and both offering. our and entertainment retailers business on expand in strategy to terms numbers. and scale, to benefits levels chain, toy continue service continue We quarterly for

the in the good and and toy business opportunities that the toy the versa. foundational aisle. for strong outside see business, is So the we is entertainment toy and believe of our we business, of in toy the we vice It toy for believe A symbiotic. business very we benefits franchise is believe strategy

execution Barbie work example. and not hand. other the it's that it's perform hand the we franchise, across one that see across And is either or And that franchises. both will movie in key Barbie you good together So will other

Operator

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

Jaime Katz

little value sort guys you to hoping there on if headwinds a you is could what guys any seeing products I'm we shift about share bit are mix of price some anticipate should ahead?

Anthony DiSilvestro

value. we're item. and single We a well are of house offer little everything what's cohorts I creation many Wheels some a think positioned regard, the to those Yes. quite in is of know that important in under consumers. bit price Mattel and of And from to and pressure of Barbie consumer collector I diecast that range Hot seeking a cognizant are space certainly are we mean happening price points, we to dream

So that think and brands again, very play we product into with lines. our well we our

Jaime Katz

any the more margin think about the between of of is is. Profitable split? I'm and benefits the front trajectory do Like of more cadence benefits just there bifurcation where it sort gross what the is potential goes just benefit this for early to SG&A Optimizing gross Or see is gross trying margin or then portion? and the Growth Or year we it the margin? in And to after to Program? loaded

Anthony DiSilvestro

would probably I off like also say Yes. we're we're start, we're $XX a of good said, terms and year-to-date, COGS. in to -- million I really under-indexed

so for also target program the for be we now, up XXXX year the more XX%, at And but forecast we're I think where come as really holding a full our to COGS whole XX% $XXX on to said, side. off going to COGS the good million $XX to start. is million, we're taking

Operator

line Your Citi. from from James next comes question the of Hardiman

James Hardiman

Anthony, other broadly, questions puts earlier qualitatively, in quarter. or think other expect from quantify. continue thoughts any optimizing deflation margins But curious mentioned just you XXXX. nice about assuming I to maybe But it's to seen there way follow-ups early push of if any guess Obviously, the that and early that XXXX? puts in you year-to-date, couple And too fourth going program. you're I I'm inflation inflation profitable guess for a the takes. more the on flip were for versus So cost deflation to think guess, I we've are growth and takes to we as asked. I that back to

Anthony DiSilvestro

Yes. would less that quarters, but comment it's less us on we say, deflation first a experienced for have bit benefit to and of generally, in I benefit. early XXXX, a but each our X getting of

we $XXX little year. $XXX and And in date, material of going XXX about basis QX talk I and some we prices in But -- million some a freight. in in flip basis to to over about surely XX a point XXXX, declines and that's deflation bit to QX. benefit points million QX, QX, next of think to did benefit little too early again, from inflation lower in in benefiting think ocean

James Hardiman

as good year a still like -- outpacing year excitement that a what then you a think in we wholesale And spoke us we have amount in the wholesale like mode pretty good as we fourth remind might which be sounds guy a ago? a there be that retailer enough. you like about of of ago season towards the to looked retail one-to-one the basically Fair can expecting about they retail? bit right Were destocking little key feel should holiday potentially And they a inventory, quarter? case in

Anthony DiSilvestro

all a elevated. after progress front. into that came We in year slightly We Yes. came into on same XXXX I potential would for having a things the tailwind say of made XXXX. little significant bit the

tailwind, year-on-year, a else all same. bit So the of a

Operator

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

Frederick Wightman

the Just kept unchanged, one move. the at EBITDA If didn't change just quick guys made tax and a one. pretty guidance you EPS big guidance, the and rate EBITDA we look but EPS to

So was there something else below the line that's offsetting that?

Anthony DiSilvestro

time? one it Ask time? more one that more give Right,

Frederick Wightman

tax EBITDA EPS another move, just didn't the line? guidance Yes. pretty It's the there but significantly. came down the rate Is below really offset and

Anthony DiSilvestro

I'd bit No. rate saying little it's a say range, tax that favorability is the but would EPS us not else the up move all in significant.

Ynon Kreiz

you, your you. Thank everyone, questions. Thank for

quarter the significant priorities, exactly cash Our flow. margin profitability, that. improve of In We line were with profitability. year we gross did priorities our strong achieved expand for to another generate and

is the growth prior and grow flow, cash EPS the this incredible strong expect We the of in in our generate and movie to in wrapping double-digit EBITDA, achieve year. despite adjusted success XXXX Barbie

our company and grow position in our The the and toy continue multiyear execute our it strongest is entertainment strategy business in has we expand to many offering. financial IP-driven years, to been

XX the to call and in operator. I We to turn fourth go. season expect a look days to the good grow And back quarter, with the forward the top Mattel shopping holiday we line to will for now

Operator

This conference your concludes you call. today's participation. for Thank

You disconnect. may now

Mattel (MAT) 23 Oct 242024 Q3 Earnings call transcript