Company Overview - Proactive is a publisher that provides fast, accessible, informative, and actionable business and finance news content to a global investment audience [2] - The news team operates from key finance and investing hubs including London, New York, Toronto, Vancouver, Sydney, and Perth [2] Market Focus - The company specializes in medium and small-cap markets while also covering blue-chip companies, commodities, and broader investment stories [3] - Proactive delivers news and insights across various sectors including biotech and pharma, mining and natural resources, battery metals, oil and gas, crypto, and emerging digital and EV technologies [3] Technology Adoption - Proactive is recognized for being a forward-looking and enthusiastic adopter of technology, utilizing decades of expertise and experience among its content creators [4] - The company employs automation and software tools, including generative AI, while ensuring that all content is edited and authored by humans [5]

Core Insights - Mattel, Inc. reported first-quarter 2025 results with both revenue and earnings exceeding Zacks Consensus Estimates, showing year-over-year improvement [1][3] - The company plans to increase prices on select toys in the U.S. due to rising costs from new tariffs, despite efforts to shift production away from China [1][2] Financial Performance - Adjusted loss per share was 3 cents, better than the expected loss of 11 cents, compared to a loss of 5 cents in the same quarter last year [3] - Net sales reached $826.6 million, surpassing the consensus estimate of $800 million by 3.4%, with a 2% increase year-over-year and a 4% increase in constant currency [3] Segment Performance - North America segment net sales increased by 3% year-over-year, while the International segment saw a 1% increase [4] - Gross billings in North America rose by 4%, driven by growth in Dolls, Action Figures, Building Sets, Games, and Other [4] - International gross billings increased by 1%, primarily due to growth in the EMEA and Asia Pacific regions [5] Category Performance - Worldwide gross billings from Mattel Power Brands increased by 3% year-over-year to $924.2 million [6] - Gross billings for Hot Wheels grew by 4%, while Fisher-Price saw a decline of 3% [7] Operating Results - Adjusted gross margin improved to 49.6%, up 130 basis points year-over-year, attributed to better inventory management and efficiencies from the Optimizing for Profitable Growth initiative [8] - Adjusted EBITDA for the quarter was $57.2 million, compared to $53.5 million in the prior-year quarter [9] Balance Sheet - As of March 31, 2025, cash and cash equivalents were $1.24 billion, up from $1.13 billion at the end of 2024 [11] - Total inventories decreased to $658.4 million from $669.3 million at the end of 2024, while long-term debt remained stable at $2.33 billion [11]

Core Viewpoint - The implementation of President Trump's 145% tariffs against China is unlikely to bring toy manufacturing back to America, as indicated by Mattel's CEO Ynon Kreiz [1]. Group 1: Manufacturing and Sourcing - A significant portion of toy creation, including design, development, product engineering, and brand management, occurs in America [2]. - Mattel has been diversifying its global manufacturing for nearly a decade to reduce dependence on China, with less than 40% of its products sourced from China by the end of the year [2]. - In two years, no single country will account for more than 25% of Mattel's sourcing [2].

Core Viewpoint - Mattel is raising prices on some toys and reducing reliance on China-sourced products due to a volatile macro-economic environment and evolving U.S. tariff landscape [1][5]. Group 1: Financial Impact and Strategy - Mattel expects around $270 million in incremental costs from tariffs in 2025, but plans to offset these costs through various mitigating actions [2]. - The company is taking steps to diversify its supply chain and reduce reliance on China-sourced products, aiming to cut imports from China to under 15% by next year [6][11]. - Despite tariffs not affecting Mattel's first quarter financial results, the company is implementing measures to fully offset potential future cost impacts [5]. Group 2: Market Conditions and Consumer Behavior - The current macro-economic environment makes it difficult to predict consumer spending and U.S. sales for the remainder of the year and holiday season [5]. - Many companies have halted production and shipping to the U.S. due to tariffs from China, indicating significant disruption in the industry [2]. Group 3: Production Adjustments - Mattel is increasing production of its UNO card game in India as part of its strategy to mitigate tariff impacts [9]. - The company imports Barbie dolls and Hot Wheels toys from Indonesia, Malaysia, and Thailand, which have also faced tariffs [9].

Mattel's iconic Barbies may be getting more expensive. The California-based toy manufacturer said it may have to adjust its prices in the US to offset President Donald Trump's tariffs. Mattel's CEO, Ynon Kreiz, said in a Monday earnings call with investors that the company was taking a three- pronged approach to offset the impact of Trump's tariffs. "Accelerating diversification of our supply chain and further reducing reliance on China-sourced products, optimizing product sourcing and product mix, and wher ...

智通财经5月6日电，据美国媒体当地时间5月5日报道，芭比娃娃制造商美国美泰玩具公司5日在收益报 告中表示，该公司将"在必要时"提高在美国销售的产品价格，以抵消关税政策导致的成本上升影响。美 泰公司称，关税将导致该公司今年损失2.7亿美元。美泰公司首席执行官伊农·克雷兹5日呼吁停止对玩具 产品征收关税。事实上，部分美泰公司的玩具价格已经上涨。美国泰尔西咨询集团的分析显示，4月中 旬，在美国出售的部分芭比娃娃价格一周内已经上涨了42.9%。美国玩具协会表示，在美国销售的所有 玩具，有80%由中国制造。美国政府近期的关税政策对美国玩具行业产生严重冲击。 (央视新闻) 芭比娃娃涨价42.9% 美玩具行业遭关税政策"重击" ...

Financial Performance - Net Sales increased by 2% as reported, reaching $827 million, and by 4% in constant currency [32] - Adjusted Gross Margin improved by 130 bps to 49.6% [16] - Adjusted EBITDA grew by 7% to $57 million [16] - Adjusted EPS improved by $0.02 to ($0.03) [32] Category and Geographic Performance - Gross Billings increased by 5% [34] - Vehicles gross billings increased by 6% in constant currency to $308 million [35] - Dolls gross billings increased by 2% in constant currency to $297 million [35] - Action Figures, Building Sets, Games, and Other category gross billings increased by 14% in constant currency to $193 million [35] - EMEA gross billings increased by 8% in constant currency to $239 million [38] - Asia Pacific gross billings increased by 12% in constant currency to $84 million [38] Strategic Initiatives and Outlook - Mattel is implementing mitigating actions to offset potential tariff impacts, aiming for US imports from China to be less than 15% by 2026 and less than 10% by 2027 [17] - The company is pausing full-year 2025 guidance due to macroeconomic uncertainty and tariff situation [30] - Mattel is maintaining its $600 million share repurchase target for 2025 [31] Cost Savings - Mattel achieved $19 million in savings in Q1 from the Optimizing for Profitable Growth (OPG) program [57] - The company is increasing its 2025 cost savings target to $80 million from $60 million [58]

Company Performance - Mattel reported a quarterly loss of $0.03 per share, better than the Zacks Consensus Estimate of a loss of $0.11, and an improvement from a loss of $0.05 per share a year ago, representing an earnings surprise of 72.73% [1] - The company posted revenues of $826.6 million for the quarter ended March 2025, surpassing the Zacks Consensus Estimate by 3.37% and showing an increase from $809.5 million in the same quarter last year [2] - Over the last four quarters, Mattel has exceeded consensus EPS estimates four times and topped consensus revenue estimates two times [2] Stock Outlook - Mattel shares have declined approximately 7.6% since the beginning of the year, compared to a decline of 3.3% for the S&P 500 [3] - The current consensus EPS estimate for the upcoming quarter is $0.20 on revenues of $1.1 billion, and for the current fiscal year, it is $1.59 on revenues of $5.42 billion [7] - The estimate revisions trend for Mattel is currently unfavorable, resulting in a Zacks Rank 4 (Sell) for the stock, indicating expected underperformance in the near future [6] Industry Context - The Toys - Games - Hobbies industry, to which Mattel belongs, is currently ranked in the bottom 21% of over 250 Zacks industries, suggesting a challenging environment [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact investor sentiment and stock performance [5]

Financial Performance - Mattel's net sales in Q1 2025 increased by 2% to $826.6 million compared to $809.5 million in Q1 2024[111]. - Gross billings rose by 3% to $924.2 million in Q1 2025, with a $25.2 million increase compared to $898.9 million in Q1 2024[111]. - Operating loss increased to $53.0 million in Q1 2025, compared to a loss of $35.5 million in Q1 2024, reflecting a 49% year-over-year increase[110]. - North America segment net sales were $491.4 million in Q1 2025, a 3% increase from $477.8 million in Q1 2024[124]. - International segment net sales were $335.3 million in Q1 2025, a 1% increase from $331.7 million in Q1 2024[132]. - International segment operating income rose to $23.3 million in Q1 2025, compared to $9.3 million in Q1 2024, primarily due to higher gross profit[138]. Cost and Margin Analysis - Gross margin expanded to 49.4% in Q1 2025 from 48.0% in Q1 2024, driven by lower inventory management costs and favorable foreign currency exchange[106]. - Cost of sales decreased by 1% to $418.5 million in Q1 2025 from $420.6 million in Q1 2024[116]. - Other selling and administrative expenses rose to $390.9 million, or 47.3% of net sales, in Q1 2025, up from $352.9 million, or 43.6% of net sales, in Q1 2024[119]. - Advertising and promotion expenses as a percentage of net sales were 8.5% in Q1 2025, compared to 8.8% in Q1 2024[118]. - Sales adjustments increased to $97.5 million in Q1 2025, up from $89.4 million in Q1 2024, representing 11.8% of net sales[115]. Cash Flow and Financial Position - Mattel ended Q1 2025 with a cash balance of $1.24 billion, up from $1.13 billion in Q1 2024[106]. - Cash flows from operating activities were $24.8 million in Q1 2025, down from $35.5 million in Q1 2024, primarily due to a decrease in net income[150]. - Cash flows used for investing activities increased to $31.3 million in Q1 2025 from $28.4 million in Q1 2024, mainly due to higher capital expenditures[151]. - Cash flows used for financing activities rose to $161.9 million in Q1 2025 from $131.3 million in Q1 2024, driven by $60 million in higher share repurchases[152]. - Total debt was $2.34 billion as of March 31, 2025, consistent with $2.33 billion at December 31, 2024[159]. - Stockholders' equity decreased by $134.5 million to $2.13 billion at March 31, 2025, primarily due to share repurchases of $160 million and a net loss of $40.3 million[160]. Inventory and Receivables - Accounts receivable decreased by $369.9 million to $633.3 million at March 31, 2025, primarily due to seasonal declines[155]. - Inventories increased by $156.7 million to $658.4 million at March 31, 2025, primarily due to seasonal inventory build[156]. - Cash and equivalents decreased by $144.2 million to $1.24 billion at March 31, 2025, from $1.39 billion at December 31, 2024, mainly due to share repurchases[154]. Currency and Foreign Exchange - Mattel's financial results are impacted by foreign currency exchange rate fluctuations, particularly with the Euro and British pound sterling[170]. - The company uses foreign currency forward exchange contracts to hedge its exposure, with maturity dates of up to 24 months[170]. - A one percent change in the U.S. dollar would have impacted Mattel's Q1 2025 net sales by approximately 0.2%[172]. - The estimated impact of a one percent change in the U.S. dollar on net income per share would be less than $0.01[172]. - Currency translation adjustments are recorded as a component of accumulated other comprehensive loss within stockholders' equity[171]. Strategic Initiatives - The OPG program aims for $200 million in targeted annual gross cost savings by 2026, with 60% benefiting cost of sales and 40% benefiting other selling and administrative expenses[139]. - Mattel's estimated costs associated with the OPG program range from $115 million to $145 million, including severance and restructuring costs of $110 million to $135 million[140]. - As of March 31, 2025, cumulative severance and restructuring charges related to the OPG program amounted to approximately $94 million, with realized cumulative cost savings of approximately $103 million, representing a 60% benefit to cost of sales[141].

Financial Data and Key Metrics Changes - Net sales grew 2% as reported and 4% in constant currency to $827 million [7][27] - Adjusted gross margin increased 130 basis points to 49.6% [7][27] - Adjusted EBITDA grew 7% to $57 million [7][27] - Adjusted loss per share improved by $0.02 to a loss of $0.03 [27][32] - Cash from operations was $25 million compared to $35 million in the prior year [32] - Free cash flow generated over the last twelve months was $582 million compared to $964 million in the prior year [33] Business Line Data and Key Metrics Changes - Dolls gross billings increased 2%, driven by Disney Princess and Wicked, while Barbie and American Girl were comparable to the prior year [28][15] - Vehicles increased 6%, with Hot Wheels growing 7% [28][15] - Infant toddler and preschool overall declined 5% due to planned exits in baby gear and Power Wheels, partly offset by growth in preschool entertainment [28][15] - Challenger categories overall increased 14%, driven by growth in Action Figures and Games [28][15] - Action Figures grew double digits, driven by Minecraft, Jurassic World, and WWE [28][15] Market Data and Key Metrics Changes - Gross billings increased 4% in North America, including double-digit growth in Canada [30] - EMEA increased 8% with growth across almost every market [30] - Asia Pacific increased 12%, driven by growth in Australia, India, and China [30] - Latin America declined 7%, reflecting the impact of retailers reducing inventory levels [30] Company Strategy and Development Direction - The company is focusing on diversifying its supply chain and reducing reliance on China-sourced products [8][9] - Plans to relocate production of 500 toy SKUs from China to other locations in 2025 [10] - Aiming to reduce U.S. imports from China to less than 15% of global production by 2026 and less than 10% by 2027 [13][9] - Committed to maintaining a strong balance sheet and executing a $600 million share repurchase program for 2025 [24][33] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in mitigating actions to offset potential tariff impacts [23][41] - The company is pausing full-year 2025 guidance due to uncertainty in consumer spending and the evolving tariff situation [22][40] - Management believes the toy industry has historically proven resilient during uncertain times [23] Other Important Information - The company reported a strong first quarter with top-line growth and gross margin expansion [7][24] - The entertainment strategy is progressing, with several movies in production and partnerships with major entertainment companies [19][20] Q&A Session Summary Question: Can you outline the roadmap to offset the impact of incremental tariffs? - Management indicated that Q1 was not impacted by tariffs and does not expect Q2 to be affected, with potential impacts anticipated in Q3 [44] - Current exposure to tariffs is estimated at $270 million, before considering mitigating actions [45][46] Question: What flexibility exists in the supply chain to transition out of China? - The company has established a flexible, modular supply chain over seven years, sourcing from multiple countries [51][52] Question: How confident is the company in passing along pricing to retailers? - Management emphasized long-standing relationships with retailers and a strategic approach to pricing while keeping consumer value in mind [59][60] Question: What is the current state of inventory levels post-Easter? - Inventory levels are appropriate for this time of year, with retail inventories up slightly due to the later Easter holiday [80] Question: Have there been changes in retailer buying behavior? - No notable pull forward or cancellations have been observed, but some volatility is expected in gross billings due to direct import assessments [84][85]