Mattel(US:MAT)2025-05-05 22:05Financial 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].