Workflow
Mattel(MAT) - 2025 Q1 - Quarterly Report
MATMattel(MAT)2025-05-05 22:05
Transcript
Slide

Financial Performance - Mattel's net sales in Q1 2025 increased by 2% to 826.6millioncomparedto826.6 million compared to 809.5 million in Q1 2024[111]. - Gross billings rose by 3% to 924.2millioninQ12025,witha924.2 million in Q1 2025, with a 25.2 million increase compared to 898.9millioninQ12024[111].−Operatinglossincreasedto898.9 million in Q1 2024[111]. - Operating loss increased to 53.0 million in Q1 2025, compared to a loss of 35.5millioninQ12024,reflectinga4935.5 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 477.8millioninQ12024[124].−Internationalsegmentnetsaleswere477.8 million in Q1 2024[124]. - International segment net sales were 335.3 million in Q1 2025, a 1% increase from 331.7millioninQ12024[132].−Internationalsegmentoperatingincomeroseto331.7 million in Q1 2024[132]. - International segment operating income rose to 23.3 million in Q1 2025, compared to 9.3millioninQ12024,primarilyduetohighergrossprofit[138].CostandMarginAnalysis−Grossmarginexpandedto49.49.3 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 420.6millioninQ12024[116].−Othersellingandadministrativeexpensesroseto420.6 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 352.9million,or43.6352.9 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 89.4millioninQ12024,representing11.889.4 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 1.13billioninQ12024[106].−Cashflowsfromoperatingactivitieswere1.13 billion in Q1 2024[106]. - Cash flows from operating activities were 24.8 million in Q1 2025, down from 35.5millioninQ12024,primarilyduetoadecreaseinnetincome[150].−Cashflowsusedforinvestingactivitiesincreasedto35.5 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 28.4millioninQ12024,mainlyduetohighercapitalexpenditures[151].−Cashflowsusedforfinancingactivitiesroseto28.4 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 131.3millioninQ12024,drivenby131.3 million in Q1 2024, driven by 60 million in higher share repurchases[152]. - Total debt was 2.34billionasofMarch31,2025,consistentwith2.34 billion as of March 31, 2025, consistent with 2.33 billion at December 31, 2024[159]. - Stockholders' equity decreased by 134.5millionto134.5 million to 2.13 billion at March 31, 2025, primarily due to share repurchases of 160millionandanetlossof160 million and a net loss of 40.3 million[160]. Inventory and Receivables - Accounts receivable decreased by 369.9millionto369.9 million to 633.3 million at March 31, 2025, primarily due to seasonal declines[155]. - Inventories increased by 156.7millionto156.7 million to 658.4 million at March 31, 2025, primarily due to seasonal inventory build[156]. - Cash and equivalents decreased by 144.2millionto144.2 million to 1.24 billion at March 31, 2025, from 1.39billionatDecember31,2024,mainlyduetosharerepurchases[154].CurrencyandForeignExchange−Mattel′sfinancialresultsareimpactedbyforeigncurrencyexchangeratefluctuations,particularlywiththeEuroandBritishpoundsterling[170].−Thecompanyusesforeigncurrencyforwardexchangecontractstohedgeitsexposure,withmaturitydatesofupto24months[170].−AonepercentchangeintheU.S.dollarwouldhaveimpactedMattel′sQ12025netsalesbyapproximately0.21.39 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 200millionintargetedannualgrosscostsavingsby2026,with60200 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 145million,includingseveranceandrestructuringcostsof145 million, including severance and restructuring costs of 110 million to 135million[140].−AsofMarch31,2025,cumulativeseveranceandrestructuringchargesrelatedtotheOPGprogramamountedtoapproximately135 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].