Core Insights - Mattel's stock surged 12.5% after reporting a strong fourth-quarter earnings beat, with adjusted earnings of $0.35 per share on sales of $1.65 billion, surpassing analyst expectations of $0.20 per share on $1.63 billion in sales [1][2] Financial Performance - In Q4, Mattel's sales grew by 2% year over year, and its gross profit margin expanded by 190 basis points to 50.7% [2] - For the full year, Mattel's sales declined by 1% to $5.4 billion, but it improved its gross margin by 330 basis points to 50.8% [3] - GAAP earnings per share for the full year were $1.58, significantly higher than the $0.60 per share earned in 2023 [3] Future Outlook - CEO Ynon Kreiz described 2024 as a "year of strong operational excellence" and projected sales growth of 2% to 3% while maintaining profit margins [4] - Management forecasted adjusted earnings to grow to between $1.66 and $1.72 per share, indicating a growth rate of about 4% [4][5]

Group 1 - Mattel is considering raising prices on toys like Barbie and Hot Wheels due to new tariffs imposed by President Trump [1][2] - Approximately 40% of Mattel's toys are manufactured in China, with less than 10% produced in Mexico [2] - The company is exploring supply chain adjustments and potential price increases as mitigating actions against the tariffs [2] Group 2 - A 10% tariff on Chinese goods was recently imposed, while planned 25% duties on imports from Mexico and Canada have been paused for 30 days [3] - Economists predict that these tariffs will likely result in price increases for consumers [3] - The imposition of tariffs on Mexico and Canada remains uncertain, as Trump may use them as a negotiation tactic [3]

Core Insights - Mattel, Inc. reported fourth-quarter 2024 results with earnings exceeding expectations while revenues fell short of estimates, showing year-over-year growth in both metrics [1][4]. Financial Performance - Adjusted earnings per share (EPS) for Q4 were 35 cents, surpassing the Zacks Consensus Estimate of 23 cents by 52.2%, compared to 29 cents in the prior-year quarter [4]. - Net sales reached $1.64 billion, slightly below the consensus estimate of $1.66 billion, marking a 2% increase year-over-year [4]. - For the full year 2024, net sales totaled $5.38 billion, down from $5.44 billion in 2023, while net income rose to $541.8 million from $214.4 million in 2023 [14]. Segment Performance - North America segment net sales increased by 1% year-over-year, while the International segment saw a 3% increase [5]. - Gross billings for Vehicles rose by 14% year-over-year, driven primarily by Hot Wheels, while Dolls experienced a decline of 4% [10][8]. Cost Management and Shareholder Value - In 2024, Mattel repurchased $400 million worth of shares and is on track to achieve a $200 million cost-savings target by 2026 [2]. - The company plans a $600 million share repurchase program for 2025, indicating a commitment to long-term shareholder value [2]. Operational Efficiency - Adjusted gross margin improved to 50.8%, up 200 basis points year-over-year, attributed to supply-chain efficiencies and favorable foreign exchange [11]. - Adjusted EBITDA for the quarter was $248.9 million, an increase from $234 million [11]. Future Outlook - For 2025, Mattel anticipates net sales growth of 2-3% year-over-year and adjusted EPS between $1.66 and $1.72 [15].

Core Insights - Mattel's shares rose over 12% in premarket trading following the announcement of plans to mitigate tariff threats and a positive sales forecast for 2025 [2][6] - The company expects 2025 net sales to grow by 2% to 3% compared to a 1.1% decline in 2024 sales, with adjusted EPS guidance between $1.66 and $1.72 [2][3] Tariff Mitigation Strategies - Mattel plans to leverage its supply chain and implement price increases to counteract the impact of new U.S. tariffs on imports from China, Mexico, and Canada [3][6] - UBS analysts noted that the guidance for EPS growth despite tariffs was unexpected, suggesting that Mattel may shift some production out of China and optimize its supply chain [4][6] Production and Sales Performance - The company sources toys from seven countries, with China expected to account for less than 40% of production this year, and no single country projected to exceed 25% of total global production by 2027 [5] - In the fourth quarter, Mattel reported a 2% year-over-year increase in net sales to $1.65 billion and adjusted EPS of 35 cents, surpassing consensus estimates [5]

Mattel, Inc. (NASDAQ:MAT) Q4 2024 Earnings Conference Call February 4, 2025 5:00 PM ET Company Participants Jenn Kettnich - Vice President, Investor Relations Ynon Kreiz - Chairman and Chief Executive Officer Anthony DiSilvestro - Chief Financial Officer Conference Call Participants Stephen Laszczyk - Goldman Sachs Alexander Perry - Bank of America Megan Clapp - Morgan Stanley Chris Horvers - JPMorgan Arpine Kocharyan - UBS Eric Handler - Roth Capital Fred Wightman - Wolfe Research Linda Bolton-Weiser - D.A ...

Fourth Quarter and Full Year 2024 Earnings (Unaudited Results) February 4, 2025 Cautionary Note Regarding Forward-Looking Statements / Presentation Information Mattel cautions the viewer that this presentation contains a number of forward-looking statements, which are statements that relate to the future and are, by their nature, uncertain. Forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts and include statements regarding Mattel's guidan ...

Core Insights - Mattel reported $1.65 billion in revenue for Q4 2024, a year-over-year increase of 1.6% and an EPS of $0.35, up from $0.29 a year ago [1] - The revenue fell short of the Zacks Consensus Estimate of $1.66 billion by -0.53%, while the EPS exceeded the consensus estimate of $0.23 by +52.17% [1] Revenue Performance - Barbie gross billings were $406 million, below the average estimate of $419.40 million, reflecting a year-over-year decline of -14.2% [4] - Hot Wheels gross billings reached $481.40 million, surpassing the estimated $446.19 million, marking a year-over-year increase of +15.3% [4] - Fisher-Price gross billings were $206.10 million, below the average estimate of $249.61 million, indicating a year-over-year decline of -16% [4] - Other categories reported gross billings of $788.50 million, exceeding the estimate of $751.94 million [4] Category Performance - Infant, Toddler, and Preschool category gross billings were $276.20 million, slightly below the estimate of $279.96 million, with a year-over-year change of -5.5% [4] - Vehicles category gross billings were $543.80 million, above the estimate of $508.75 million, reflecting a year-over-year increase of +14.5% [4] - Dolls category gross billings were $734.90 million, below the average estimate of $745.05 million, showing a year-over-year decline of -3.7% [4] Stock Performance - Mattel's shares have returned -3% over the past month, compared to a +1% change in the Zacks S&P 500 composite [3] - The stock currently holds a Zacks Rank 3 (Hold), suggesting it may perform in line with the broader market in the near term [3]

Core Viewpoint - Mattel reported quarterly earnings of $0.35 per share, exceeding the Zacks Consensus Estimate of $0.23 per share, and showing an increase from $0.29 per share a year ago, representing an earnings surprise of 52.17% [1][2] Financial Performance - The company posted revenues of $1.65 billion for the quarter ended December 2024, slightly missing the Zacks Consensus Estimate by 0.53%, compared to $1.62 billion in the same quarter last year [2] - Over the last four quarters, Mattel has surpassed consensus EPS estimates four times but has only topped consensus revenue estimates once [2] Stock Performance and Outlook - Mattel shares have increased approximately 0.3% since the beginning of the year, underperforming the S&P 500, which gained 1.9% [3] - The future performance of the stock will largely depend on management's commentary during the earnings call and the trends in earnings estimate revisions [3][4] Earnings Estimates - The current consensus EPS estimate for the upcoming quarter is -$0.08 on revenues of $812.73 million, and for the current fiscal year, it is $1.58 on revenues of $5.5 billion [7] - The estimate revisions trend for Mattel is mixed, resulting in a Zacks Rank 3 (Hold), indicating expected performance in line with the market [6] Industry Context - The Toys - Games - Hobbies industry, to which Mattel belongs, is currently ranked in the top 16% of over 250 Zacks industries, suggesting a favorable outlook compared to lower-ranked industries [8] - Hasbro, a competitor in the same industry, is expected to report quarterly earnings of $0.36 per share, reflecting a year-over-year decline of 5.3% [9]

Financial Performance - Fourth quarter 2024 net sales increased by 2% to $1,646 million, or 3% in constant currency, compared to the prior year[3]. - Full year 2024 net sales decreased by 1% to $5,380 million, or 0.5% in constant currency, compared to the prior year[4]. - Fourth quarter 2024 reported operating income was $158 million, an increase of $18 million, while adjusted operating income was $161 million, an increase of $14 million[5]. - Full year 2024 reported net income improved by $327 million to $542 million, with earnings per share increasing to $1.58 from $0.60[5]. - Gross margin for the fourth quarter 2024 increased to 50.7%, up 190 basis points from the prior year[8]. - Worldwide net sales for the year ended December 31, 2024, were $5,379.5 million, a slight decrease of 1% compared to $5,441.2 million in 2023[47]. - Net income for the year ended December 31, 2024, was $541.8 million, a significant increase of 153% from $214.4 million in 2023[40]. - Adjusted EBITDA for the year ended December 31, 2024, was $1,057.6 million, reflecting a 12% increase from $947.8 million in 2023[46]. Shareholder Returns - The company repurchased $400 million of shares in 2024 and plans to repurchase an additional $600 million in 2025[5]. - For the year ended December 31, 2024, Mattel reported a net income per common share of $1.58, a significant increase of 163% compared to $0.60 in 2023[44]. Sales by Region - The North America segment saw a 1% increase in net sales in the fourth quarter, while international net sales increased by 3%[6][7]. - North America net sales for Q4 2024 were $975.5 million, a 1% increase from $968.5 million in Q4 2023[49]. - International net sales for Q4 2024 reached $670.9 million, reflecting a 3% increase compared to $652.2 million in Q4 2023[50]. - EMEA region saw a 10% increase in net sales, totaling $402.6 million in Q4 2024, up from $366.5 million in Q4 2023[50]. - Latin America net sales decreased by 16% in Q4 2024, totaling $153.4 million compared to $182.4 million in Q4 2023[50]. - The Asia Pacific region experienced an 11% increase in net sales, totaling $114.9 million in Q4 2024, up from $103.3 million in Q4 2023[50]. Brand Performance - Worldwide gross billings for vehicles increased by 14% to $544 million in the fourth quarter, primarily driven by growth in Hot Wheels[17]. - Barbie brand gross billings decreased by 12% to $1,350.1 million in 2024 from $1,537.8 million in 2023[48]. - Hot Wheels brand gross billings increased by 10% to $1,575.0 million in 2024 compared to $1,432.4 million in 2023[48]. - Barbie brand gross billings decreased by 14% in Q4 2024, totaling $217.4 million compared to $252.8 million in Q4 2023[49]. - Hot Wheels brand gross billings increased by 11% in Q4 2024, reaching $220.3 million, up from $198.5 million in Q4 2023[49]. Operational Metrics - Adjusted Gross Profit and Adjusted Gross Margin are key metrics, with Adjusted Gross Margin providing insight into underlying trends in core profitability[27]. - Adjusted Operating Income and Adjusted Operating Income Margin exclude severance and restructuring expenses, offering a clearer view of operational performance[29]. - Adjusted Earnings Per Share reflects core business performance, adjusted for non-recurring items, providing a more accurate earnings measure[30]. - EBITDA and Adjusted EBITDA are critical for assessing business performance, with Adjusted EBITDA excluding non-core expenses[31]. - Free Cash Flow represents net cash from operating activities minus capital expenditures, crucial for evaluating liquidity[32]. - The Leverage Ratio, calculated as Total Debt divided by Adjusted EBITDA, helps gauge financial health and operational efficiency[33]. - Net Debt, which accounts for cash and equivalents, is a vital indicator for monitoring liquidity and balance sheet strength[34]. - Constant Currency metrics are used to analyze performance trends without the impact of exchange rate fluctuations, enhancing comparability[36]. - Gross Billings serve as a key performance indicator, reflecting amounts invoiced to customers and highlighting significant business trends[37]. Inventory and Cash Flow - Cash flows provided by operating activities for the year ended December 31, 2024, were $800.6 million, down from $869.8 million in 2023[42]. - Net cash flows provided by operating activities for the year ended December 31, 2024, were $800.6 million, down 8% from $869.8 million in 2023[46]. - The company reported a decrease in inventories to $501.7 million in 2024 from $571.6 million in 2023[41]. - The accounts receivable net days of sales outstanding (DSO) improved to 55 days in 2024 from 60 days in 2023[42]. - Free cash flow for the year ended December 31, 2024, was $597.9 million, down 16% from $709.5 million in 2023[46]. Debt and Taxation - The company’s long-term debt remained stable at $2,334.4 million as of December 31, 2024, compared to $2,330.0 million in 2023[41]. - The leverage ratio (Total Debt/Adjusted EBITDA) improved to 2.2x in 2024 from 2.5x in 2023[46]. - The tax rate as reported for 2024 was 17%, a decrease of 41 percentage points from 58% in 2023[45].

Group 1 - The core viewpoint is that Mattel (MAT) is well-positioned to continue its earnings-beat streak, particularly due to its strong historical performance in exceeding earnings estimates [1][3]. - Mattel reported earnings of $1.14 per share for the last quarter, surpassing the Zacks Consensus Estimate of $0.94 per share, resulting in a surprise of 21.28% [2]. - The company has an average surprise of 20.01% over the past two quarters, indicating a consistent ability to exceed expectations [1][2]. Group 2 - There has been a favorable change in earnings estimates for Mattel, with a positive Earnings ESP of +7.69%, suggesting increased analyst optimism regarding its near-term earnings potential [3][6]. - The combination of a positive Earnings ESP and a Zacks Rank 3 (Hold) indicates a high likelihood of another earnings beat, with historical data showing that such combinations lead to positive surprises nearly 70% of the time [4][6]. - The next earnings report for Mattel is anticipated to be released on February 4, 2025 [6].