Financial Performance - Mattel's net sales for Q3 2023 increased by $163.0 million, or 9%, to $1.92 billion compared to $1.76 billion in Q3 2022[112]. - Gross billings rose by $173.7 million, or 9%, to $2.12 billion in Q3 2023, with a favorable currency exchange rate impact of 3%[114]. - Operating income increased by 21% to $473.9 million in Q3 2023, compared to $391.4 million in Q3 2022[111]. - Consolidated net sales for the first nine months of 2023 were $3.82 billion, a decrease of $212.2 million, or 5%, compared to $4.03 billion in the same period of 2022[145]. - Gross billings for the first nine months of 2023 were $4.26 billion, a decrease of $228.1 million, or 5%, compared to $4.49 billion in the first nine months of 2022[146]. Gross Margin and Cost Management - The gross margin improved to 51.0% in Q3 2023 from 48.2% in Q3 2022, driven by favorable pricing and a strong product mix related to the Barbie movie[119]. - Gross margin increased to 46.9% in the first nine months of 2023 from 46.6% in the same period of 2022, driven by favorable pricing and realized savings[151]. - Gross margin decreased to 45.5% in the first nine months of 2023 from 46.4% in the same period of 2022, impacted by inventory management and cost inflation[163]. - Cost of sales increased by 6% to $553.3 million in Q3 2023, primarily due to higher product and logistics costs[130]. - Cost of sales decreased by $84.6 million, or 7%, to $1.16 billion in the first nine months of 2023 from $1.25 billion in the same period of 2022[162]. Segment Performance - North America segment net sales were $1.10 billion in Q3 2023, a 10% increase from $1.00 billion in Q3 2022, with segment operating income rising to $405.7 million[125][132]. - International segment net sales reached $771.8 million in Q3 2023, a 10% increase from $704.6 million in Q3 2022, with segment operating income increasing to $202.5 million[133][140]. - Net sales for the American Girl segment in Q3 2023 were $42.6 million, a decrease of $6.4 million, or 13%, compared to $49.0 million in Q3 2022[141]. - The American Girl segment reported net sales of $103.7 million, a decrease of 11% from $117.1 million in the same period of 2022, primarily due to lower billings of Girl of the Year dolls[173]. Cash Flow and Financing - Cash flows used for operations improved by $195.1 million, totaling $79.6 million for the first nine months of 2023[107]. - Cash flows used for operating activities were $79.6 million in the first nine months of 2023, a decrease from $274.8 million in the same period of 2022[192]. - Cash and equivalents decreased by $305.5 million to $455.7 million at September 30, 2023, primarily due to capital expenditures of $117.5 million and share repurchases of $109.9 million[196]. - Cash flows used for financing activities increased to $119.5 million in the first nine months of 2023, compared to $9.5 million in the same period of 2022, mainly due to share repurchases[194]. Shareholder Actions - Mattel executed $60.0 million in share repurchases during Q3 2023, with a total of $109.9 million in repurchases for the first nine months of 2023[107]. - Stockholders' equity decreased by $20.8 million to $2.04 billion at September 30, 2023, primarily due to share repurchases of $109.9 million[202]. Tax and Interest Expenses - Provision for income taxes rose to $309.3 million in Q3 2023 from $80.0 million in Q3 2022, including a net discrete income tax expense of $200.7 million[123]. - Interest expense decreased to $30.7 million in Q3 2023 from $33.9 million in Q3 2022, due to the repayment of $250.0 million in Senior Notes[122]. - Interest expense decreased to $92.5 million in the first nine months of 2023 from $99.7 million in the same period of 2022, primarily due to the repayment of senior notes[154]. Inventory and Accounts Receivable - Retailer inventory levels decreased compared to prior year levels, with Mattel's owned inventory down by $293.2 million as of September 30, 2023[108]. - Accounts receivable increased by $710.8 million to $1.57 billion at September 30, 2023, primarily due to seasonality and increased net sales[197]. - Inventories decreased by $103.5 million to $790.5 million at September 30, 2023, attributed to higher inventory production and cost inflation in 2022[198]. Currency and Foreign Exchange - Mattel calculates percentage changes in period-over-period results at constant currency exchange rates to provide a clearer view of business performance, mitigating the impact of foreign currency fluctuations[208]. - The primary currencies affecting Mattel's foreign currency transaction exposure in the first nine months of 2023 were the Chinese yuan, Euro, Russian ruble, and Turkish lira[212]. - A one percent change in the U.S. dollar would have impacted Mattel's third quarter net sales by approximately 0.3% and had less than a $0.01 impact on net income per share[214]. - Mattel uses foreign currency forward exchange contracts to hedge its exposure to foreign currency transaction risk, with contracts generally maturing within 24 months[212]. Cost Savings Initiatives - The Optimizing for Growth program is expected to exceed targeted annual gross cost savings of $300 million, with approximately $297 million realized as of September 30, 2023[177]. - Estimated total cash expenditures associated with the Optimizing for Growth program are expected to be approximately $155 to $185 million[178]. - Mattel realized cumulative cost savings of approximately $372 million, representing a 70% benefit to cost of sales, 25% benefit to other selling and administrative expenses, and 5% benefit to advertising and promotion expenses[181].

Call Start: 17:00 January 1, 0000 6:01 PM ET Mattel, Inc. (NASDAQ:MAT) Q3 2023 Earnings Conference Call October 25, 2023 17:00 ET Company Participants David Zbojniewicz - Head of Investor Relations Ynon Kreiz - Chairman & Chief Executive Officer Anthony DiSilvestro - Chief Financial Officer Conference Call Participants Arpine Kocharyan - UBS Stephen Laszczyk - Goldman Sachs James Hardiman - Citi Linda Bolton-Weiser - D.A. Davidson Drew Crum - Stifel Eric Handler - ROTH MKM Chris Horvers - JPMorgan Jason Haa ...

Net Sales and Gross Billings - Net sales in Q2 2023 decreased by $148.5 million (12%) to $1.09 billion compared to $1.24 billion in Q2 2022, primarily due to lower gross billings[93] - Gross billings in Q2 2023 decreased by $148.8 million (11%) to $1.23 billion compared to $1.38 billion in Q2 2022, with a 1% favorable currency exchange rate impact[96] - Consolidated net sales for the first half of 2023 were $1.90 billion, a 16% decrease compared to $2.28 billion in the first half of 2022[116] - Gross billings decreased by 16% to $2.14 billion in the first half of 2023 compared to $2.54 billion in the first half of 2022, primarily due to lower billings in Action Figures, Building Sets, Games, and Other (-39%), Infant, Toddler, and Preschool (-28%), and Dolls (-6%), partially offset by higher billings in Vehicles (+6%)[119] Product Category Performance - Dolls gross billings increased by 10% in Q2 2023, driven by a 13% increase in Disney Princess and Disney Frozen products and a 9% increase in Monster High products, partially offset by a 5% decrease in Barbie products[96] - Infant, Toddler, and Preschool gross billings decreased by 28% in Q2 2023, with a 23% decline in Fisher-Price products and a 2% decline in Fisher-Price Friends products[96] - Vehicles gross billings increased by 11% in Q2 2023, driven by a 9% increase in Hot Wheels products and a 2% increase in Matchbox products[96] - Action Figures, Building Sets, Games, and Other gross billings decreased by 39% in Q2 2023, with a 20% decline in Jurassic World products and a 14% decline in Lightyear products[96] - Dolls gross billings in North America increased 11% in Q2 2023, driven by higher sales of Disney Princess, Disney Frozen, and Monster High products, partially offset by a 5% decline in Barbie sales[106] - Dolls gross billings increased by 14% to $201.4 million in Q2 2023, driven by higher sales of Disney Princess, Disney Frozen, and Monster High products, partially offset by a 6% decline in Barbie products[110] - Vehicles gross billings rose by 26% to $190.2 million in Q2 2023, primarily due to a 23% increase in Hot Wheels products and a 3% increase in Matchbox products[111] - Action Figures, Building Sets, Games, and Other gross billings declined by 35% to $92.9 million in Q2 2023, mainly due to lower sales of Jurassic World and Lightyear products[111] - Barbie gross billings decreased by 23% to $459.6 million, while Hot Wheels increased by 6% to $560.1 million, and Fisher-Price decreased by 27% to $290.3 million[119] - Vehicles gross billings increased by 16%, primarily due to higher billings of Hot Wheels products[135] Operating and Net Income - Operating income in Q2 2023 decreased by $62.3 million (50%) to $62.8 million compared to $125.1 million in Q2 2022[92] - Net income in Q2 2023 decreased by $39.2 million (59%) to $27.2 million compared to $66.4 million in Q2 2022[92] - Operating loss for the first half of 2023 was $52.3 million, compared to an operating income of $205.1 million in the first half of 2022[115] - Net loss for the first half of 2023 was $79.3 million, compared to a net income of $87.9 million in the first half of 2022[115] Gross Margin and Cost of Sales - Gross margin increased to 45.1% in Q2 2023 from 44.4% in Q2 2022, supported by favorable pricing actions (170 bps), cost savings from the Optimizing for Growth program (150 bps), and favorable currency exchange (90 bps)[98] - Cost of sales decreased by $89.4 million (13%) to $597.4 million in Q2 2023, driven by reductions in product and other costs ($79.2 million, 14%) and royalty expenses ($9.2 million, 15%)[97] - Gross margin decreased to 42.7% in Q2 2023 from 45.2% in Q2 2022, impacted by unfavorable currency exchange, inventory management efforts, and cost inflation[111] - Gross profit for the first half of 2023 was $815.6 million, a 21% decrease from $1,031.8 million in the first half of 2022, with gross margin declining by 240 basis points to 42.9%[115] - Cost of sales decreased by 13% to $1.09 billion in the first half of 2023, driven by a 14% decrease in product and other costs to $860.6 million and a 17% decrease in royalty expense to $87.3 million[120] - Gross margin decreased to 42.9% in the first half of 2023 from 45.3% in the first half of 2022, primarily due to inventory management efforts (-220 basis points) and cost inflation (-170 basis points), partially offset by favorable pricing actions (+160 basis points)[121] - Gross margin decreased to 42.1% in the first half of 2023 from 45.3% in the first half of 2022, primarily due to inventory management efforts and cost inflation[137] Advertising and Promotion Expenses - Advertising and promotion expenses as a percentage of net sales increased to 8.3% in Q2 2023 from 7.3% in Q2 2022, primarily due to a 12% decrease in net sales[99] - Advertising and promotion expenses increased to 8.7% of net sales in the first half of 2023, up from 7.2% in the first half of 2022, due to a 16% decrease in net sales[122] Regional Performance - North America segment net sales decreased by $129.7 million (18%) to $596.8 million in Q2 2023, with gross billings down $137.5 million (18%) to $637.4 million[105][106] - International segment net sales decreased by $13.7 million (3%) to $462.7 million in Q2 2023, with gross billings down $6.2 million and sales adjustments increasing by $7.5 million[109] - North America segment operating income decreased by $58.9 million (30%) to $140.0 million in Q2 2023, primarily due to lower gross profit[107] - Gross billings for the International segment decreased by 1% to $561.8 million in Q2 2023, compared to $568.0 million in Q2 2022, with a favorable currency exchange impact of 2 percentage points[110] - North America segment net sales decreased by 22% to $1.03 billion in the first half of 2023, with gross billings down 22% to $1.11 billion, primarily due to lower billings across all categories[126][127] - North America segment operating income decreased by 50% to $184.0 million in the first half of 2023, driven by lower gross profit[131] - Net sales for the International segment decreased by 8% to $806.8 million in the first half of 2023 compared to $880.2 million in the same period of 2022[133] - Gross billings for the International segment decreased by 8% to $970.4 million in the first half of 2023 compared to $1.05 billion in the first half of 2022[134] - Sales adjustments decreased to $163.6 million in the first half of 2023 from $174.1 million in the first half of 2022, with sales adjustments as a percentage of net sales increasing to 20.3%[136] - Net sales for the American Girl segment decreased by 16% to $27.6 million in Q2 2023, primarily due to lower billings of Girl of the Year dolls[113] - Net sales for the American Girl segment decreased by 10% to $61.1 million in the first half of 2023 compared to $68.1 million in the same period of 2022[139] Cash Flow and Financial Position - Cash flows used for operating activities improved by $99.4 million to $325.6 million in the first half of 2023 compared to the first half of 2022[89] - Mattel executed approximately $50 million in share repurchases in the first half of 2023, with $153.2 million remaining under the share repurchase program as of June 30, 2023[89] - Cash and equivalents decreased by $461.3 million to $299.9 million at June 30, 2023, from $761.2 million at December 31, 2022, primarily due to operating activities, capital expenditures, and share repurchases[149] - Cash flows used for operating activities were $325.6 million in the first half of 2023, compared to $425.0 million in the first half of 2022, driven by lower working capital usage[147] - Accounts receivable increased by $30.7 million to $890.9 million at June 30, 2023, from $860.2 million at December 31, 2022, due to timing of sales and collections[150] - Inventories increased by $77.6 million to $971.6 million at June 30, 2023, from $894.1 million at December 31, 2022, primarily due to seasonal inventory build[150] - Total debt, including short-term borrowings, was $2.33 billion at June 30, 2023, flat compared to December 31, 2022, but decreased from $2.58 billion at June 30, 2022, due to repayment of $250.0 million in senior notes[153] - Stockholders' equity decreased by $93.9 million to $1.96 billion at June 30, 2023, from $2.06 billion at December 31, 2022, primarily due to net loss and share repurchases[154] - Mattel's cash and equivalents at June 30, 2023, were $299.9 million, with $211.7 million held by foreign subsidiaries, including $56.2 million in Russia[144] Taxes and Provisions - Provision for income taxes decreased to $14.4 million in Q2 2023 from $26.6 million in Q2 2022, driven by lower income before taxes[102] - Provision for income taxes was a benefit of $12.6 million in the first half of 2023, compared to an expense of $50.5 million in the first half of 2022, driven by lower income before taxes and lower discrete taxes[125] Optimizing for Growth Program - Mattel expanded the Optimizing for Growth program, increasing targeted annual gross cost savings from $250 million to $300 million, with estimated total cash expenditures of $155 to $185 million[140] - Mattel recorded cumulative severance and other restructuring charges related to the Program of approximately $193 million, with cumulative cost savings of approximately $330 million as of June 30, 2023[142] Currency and Financial Risks - Mattel is exposed to financial market risk resulting from changes in interest and foreign currency exchange rates[145] - Mattel estimates that a 1% change in the U.S. dollar would impact second-quarter net sales by approximately 0.4% and have less than a $0.01 impact on net income per share[164] - Mattel uses foreign currency forward exchange contracts to hedge exposure, with maturity dates of up to 24 months, primarily for inventory and intercompany transactions[163] - The company monitors counterparties in hedging transactions to manage credit risks, with risks considered in the fair value measurements of foreign currency forward exchange contracts[146] - Mattel's cash and equivalents are diversified among counterparties and securities to minimize risks, with an emphasis on safety and liquidity of principal[146] - Mattel designated the U.S. dollar as the functional currency for its Turkey subsidiary starting April 1, 2022, due to the projected three-year cumulative inflation rate exceeding 100%[165] - Mattel recorded $45.4 million of currency translation adjustments in accumulated other comprehensive loss related to its Argentina subsidiary liquidation[166] - The liquidation of Mattel's Argentina subsidiary was substantially completed during the fourth quarter of 2022[166] - Cumulative currency translation adjustments from the Argentina liquidation were recognized as a loss in other non-operating expense in Q4 2022[166]

Second Quarter 2023 Earnings (Unaudited Results) 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 guidance and goals for future periods ...

Financial Data and Key Metrics - Net sales declined 12% as reported, or 13% in constant currency [9] - Adjusted EBITDA declined by $37 million to $148 million [9] - Trailing 12-month free cash flow increased by $214 million to $361 million [9] - Adjusted gross margin of 44.9% was comparable to the prior year [20] - Adjusted operating income was $75 million, a decline of $47 million compared to the prior year [20] - Adjusted EPS was $0.10 compared to $0.18 a year ago [20] - Capital expenditures were $73 million compared to $79 million a year ago [28] - Free cash flow was a use of $399 million compared to $503 million in the prior year [28] Business Line Data and Key Metrics - Dolls grew 9%, driven by Disney Princess and Disney Frozen and the global rollout of Monster High, partly offset by Barbie [22] - Vehicles grew 10%, primarily driven by Hot Wheels die-cast vehicles [23] - Infant, Toddler and Preschool declined 29%, reflecting the impact of retailer inventory movements and overall category weakness [24] - Challenger categories in aggregate declined 40% due primarily to lower sales and action figures [24] Market Data and Key Metrics - North America gross billings declined 18%, POS declined low-double digits [24] - EMEA declined 8%, reflecting an 8 percentage point impact from Russia [25] - Latin America grew 3% with POS comparable to the prior year [25] - Asia Pacific increased 7% driven primarily by growth in China and India [25] Company Strategy and Industry Competition - The company is focused on growing its IP-driven toy business and expanding its entertainment offering [10] - The success of the Barbie movie is seen as a milestone moment for the company, showcasing the cultural resonance of its IP [13] - The company expects to outpace the industry, gain market share, and achieve its full-year guidance [10] Management Commentary on Operating Environment and Future Outlook - The company believes consumers are deferring purchases in anticipation of increased spending during the holiday season [10] - The company expects the toy industry to decline modestly for the year but remain significantly above pre-pandemic levels [10] - The company is reiterating its full-year guidance, including for net sales growth in constant currency, adjusted EPS, and adjusted EBITDA [30] Other Important Information - Richard Dickson, President and Chief Operating Officer, will step down from his position effective August 3, 2023 [16] - The company has promoted Lisa McKnight to Executive Vice President and Chief Brand Officer and Josh Silverman to Executive Vice President and Chief Franchise Officer [17] Q&A Session Summary Question: Growth trajectory for Barbie and movie economics - The success of the Barbie movie has significantly impacted the toy business and consumer product partnerships, with expectations for significant growth in the second half [35][36] Question: Future of the movie business - The company plans to execute the same strategy for future movies, collaborating with top talent and leveraging its marketing capabilities [40][41] Question: Impact of retailer inventory reduction on Barbie product line - The original and current guidance anticipate a macro retail inventory impact of 3-4 percentage points, separate from the movie toy line [44] Question: POS and shipment growth in international markets - Latin America and Asia-Pacific did not start with the same retailer inventory situation as other markets, and the inventory correction is mostly behind us [47] Question: Barbie movie's impact on earnings guidance - The company is maintaining its guidance due to industry softness and the early stage of the year, but Q3 quarter-to-date POS is positive [49] Question: Capital allocation and future media productions - The company is not changing its strategy in the near term but will continue to look for ways to invest in organic growth [52] Question: Industry softness and retail market trends - The company believes consumers are deferring purchases and expects a positive holiday season [54] Question: FX impact and EPS guidance - The company is reiterating its guidance, which includes a 2 percentage point positive impact from foreign exchange [56] Question: Cadence of revenue between Q3 and Q4 - Revenue is expected to accelerate in Q4 as the company wraps last year's atypical inventory decline [58] Question: Barbie movie's impact on toy sales - The initial take-up in movie-related products has been selling out very fast, and the company expects continued momentum with the brand [60][61] Question: Retailer inventory correction timeline - The retail inventory correction is mostly behind us, with gross billings expected to return to normal patterns in the second half [75] Question: Consumer spending shift to the holiday season - The company's internal research and economic data support the expectation of increased consumer spending in the second half [77] Question: Impact of Hollywood labor disputes - The labor disputes are delaying some projects in development, but the company expects to continue making progress after the strike [81] Question: Future of Barbie theatrically - The company has not announced anything regarding sequels but believes there are more opportunities to extend the Barbie brand [83][84]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ___________________________________________________________ FORM 10-Q ___________________________________________________________ (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2023 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number 001-05647 MA ...

Mattel, Inc. (NASDAQ:MAT) Q1 2023 Earnings Conference Call April 26, 2023 5:00 PM ET Company Participants David Zbojniewicz - Vice President of Investor Relations Ynon Kreiz - Chairman and Chief Executive Officer Anthony DiSilvestro - Chief Financial Officer Richard Dickson - President and Chief Operating Officer Conference Call Participants Drew Crum - Stifel Arpine Kocharyan - UBS Eric Handler - Roth MKM Gerrick Johnson - BMO Capital Markets Linda Bolton-Weiser - D.A. Davidson Stephen Laszczyk - Goldman S ...

First Quarter 2023 Earnings (Unaudited Results) Cautionary Note Regarding Forward-Looking Statements / Presentation Information Mattel cautions the viewer that this presentation contains a number offorward-looking statements, which are statements that relate to the future and are, by their nature, uncertain. Forward-lookingstatements can be identified by the fact that they do not relate strictly to historical or current facts and include statements regarding Mattel’s guidance and goals for future periods an ...

Customer Concentration - In 2022, Mattel's three largest customers accounted for approximately 43% of worldwide consolidated net sales, with Walmart at $0.95 billion, Target at $0.76 billion, and Amazon at $0.64 billion[35]. Financial Performance - Mattel's royalty expense increased to $230.8 million in 2022 from $184.3 million in 2021 and $158.5 million in 2020[38]. - The company incurred advertising and promotion expenses of $534.3 million in 2022, representing 9.8% of net sales[46]. - The company experienced advertising expenses of $545.7 million in 2021, which was 10.0% of net sales[46]. - Elevated retailer inventory levels are expected to negatively impact net sales in 2023, especially in the first half of the year[33]. Market Segmentation - The North America segment markets and sells toys and consumer products across all categories, with no individual country in the International segment exceeding 7% of worldwide consolidated net sales during 2022[27]. - Mattel's business is highly seasonal, with significant sales occurring during the third and fourth quarters, particularly in anticipation of the holiday season[31]. Product Development and Innovation - The company plans to expand its product offerings in 2023, including new lines for Barbie, Fisher-Price, Hot Wheels, and Monster High, as well as collaborations with Disney and Universal[19][20][22]. - The company continues to innovate in its product lines, including the introduction of new toys tied to popular franchises and digital experiences[24][26]. Workforce and Employment Practices - As of December 31, 2022, Mattel employed approximately 33,900 individuals, with 86% located outside the United States[54]. - Approximately 24,400 employees are part of Mattel's global manufacturing labor workforce[54]. - Mattel maintained 100% base pay equity globally for employees performing similar work, with women comprising 58% of the global workforce[60]. - Women comprise 58% of Mattel's global workforce and 47% of all management positions, reflecting a commitment to representation at all levels[60]. - The total representation of ethnically diverse employees in the U.S. increased to 44%[60]. - The company offers flexible work hours, health and welfare insurance options, and retirement plans to promote employee well-being[63]. Diversity, Equity, and Inclusion - Mattel has been recognized for its diversity, equity, and inclusion efforts, receiving a perfect score on the Human Rights Campaign Foundation's Corporate Equality Index[59]. - The company was ranked among Forbes 2022 World's Best Employers and 2023 America's Best Midsize Employers, highlighting its strong workplace culture[59]. - Mattel's Employee Resource Groups (ERGs) play a crucial role in fostering an inclusive culture and enhancing employee engagement[58]. - The company continues to strengthen relationships with schools and organizations to establish a talent pipeline for women in key positions[60]. Training and Development - In 2022, employees participated in several hundred thousand hours of learning content across various training programs[61]. - Mattel's employee engagement strategy includes regular feedback collection through an annual global engagement survey[56]. Compliance and Environmental Responsibility - Mattel's operations are subject to various environmental laws, and the company believes it is in substantial compliance with these regulations[51]. - Mattel has established a comprehensive set of standards for responsible manufacturing, focusing on health, safety, and environmental protections[62].

Fourth Quarter 2022 Earnings (Unaudited Results) February 8, 2023 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 guidance and goals f ...