Mattel(MAT) - 2024 Q1 - Quarterly Report

Financial Performance - Mattel's net sales for Q1 2024 were $809.5 million, a decrease of 1$814.6 million in Q1 2023[83]. - Gross billings in Q1 2024 were $898.9 million, down 1$911.3 million in Q1 2023, with a favorable currency exchange rate impact of 1%[85]. - Net sales for the North America segment increased by $7.3 million, or 2$477.8 million in Q1 2024[92]. - Net sales for the International segment decreased by $12.4 million, or 4$331.7 million in Q1 2024[97]. - Gross billings for the North America segment increased by $3.6 million, or 1$506.4 million in Q1 2024[95]. - Gross billings for the International segment decreased by $16.1 million, or 4$392.5 million in Q1 2024 compared to $408.6 million in Q1 2023, with a favorable impact from currency exchange rates of 2$68.2 million, or 14%, to $420.6 million in Q1 2024 from$488.8 million in Q1 2023[86]. - Cost of sales decreased by $17.6 million, or 9$184.1 million in Q1 2024, contributing to an increase in gross margin to 44.5% from 41.4% in Q1 2023[99]. - Other selling and administrative expenses decreased by $11.8 million to$352.9 million, or 43.6% of net sales, in Q1 2024[89]. Cash Flow and Financial Position - Operating cash flows for the trailing twelve months were $1.11 billion, contributing to a cash balance of$1.13 billion at the end of Q1 2024, compared to $461.7 million in Q1 2023[79]. - Cash flows provided by operating activities were$35.5 million in Q1 2024, a significant improvement from cash flows used of $206.4 million in Q1 2023, driven by$165.3 million in working capital improvements[108]. - Mattel's cash and equivalents decreased by $131.1 million to$1.13 billion at March 31, 2024, primarily due to $100 million in share repurchases[110]. - Total debt remained stable at$2.33 billion as of March 31, 2024, consistent with the figures from December 31, 2023, and March 31, 2023[113]. - Stockholders' equity decreased by $123.9 million to$2.03 billion at March 31, 2024, primarily due to share repurchases of $100.0 million and a net loss of$28.3 million for the first three months of 2024[114]. Shareholder Actions - The Board of Directors authorized a new $1.00 billion share repurchase program, with$100.0 million executed in Q1 2024[79]. Sales Performance by Category - Dolls gross billings decreased by 4% in Q1 2024, primarily due to lower sales of Disney Princess and Disney Frozen products[85]. - Infant, Toddler, and Preschool gross billings fell by 10%, with 7% attributed to lower sales of Baby Gear and Power Wheels products[85]. - Vehicles gross billings increased by 5%, driven by higher sales of Hot Wheels products[85]. - Dolls gross billings decreased by 7%, primarily due to lower sales of Disney Princess and Disney Frozen products, while Infant, Toddler, and Preschool gross billings decreased by 13%[98]. Cost Savings Initiatives - The "Optimizing for Profitable Growth" program aims for annual gross cost savings of $200.0 million from 2024 to 2026[79]. - The Optimizing for Profitable Growth (OPG) program aims for targeted annual gross cost savings of$200 million by 2026, with approximately 70% expected to benefit cost of sales[100]. - The OPG program has recorded cumulative severance and restructuring charges of approximately $35 million as of March 31, 2024, with realized cumulative cost savings of approximately$17 million[102]. Other Financial Metrics - Interest income increased by $10.8 million to$17.3 million in Q1 2024 from $6.5 million in Q1 2023[90]. - Sales adjustments decreased to$89.4 million in Q1 2024, representing 11.0% of net sales, down from 11.9% in Q1 2023[85]. - Sales adjustments decreased to $28.6 million in Q1 2024 from$32.3 million in Q1 2023, representing 6.0% of net sales[95]. - Sales adjustments decreased to $60.8 million in Q1 2024 from$64.5 million in Q1 2023, with sales adjustments as a percentage of net sales remaining relatively flat at 18.3%[99]. - Accounts receivable decreased by $408.6 million to$673.3 million at March 31, 2024, primarily due to seasonal declines[110]. - Inventories increased by $97.7 million to$669.3 million at March 31, 2024, primarily due to seasonal inventory build[111]. - Accounts payable and accrued liabilities decreased by $224.4 million to$1.08 billion as of March 31, 2024, from $1.31 billion at December 31, 2023, due to seasonal declines in expenditure levels[112]. Currency Impact - Currency exchange rate fluctuations impacted Mattel's results, with a one percent change in the U.S. dollar estimated to affect net sales by approximately 0.3$0.01 impact on net income per share[122].