MATTEL INC DE
For the period ended Jun 30, 2024. Filed Jul 30, 2024.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2024 · Filed Jul 30, 2024
MAT$15.35+2.5%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-03-31; filed 2024-04-30.
0001628280-24-019341
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-06-30; filed 2024-07-30.
0001628280-24-033454
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 135 previous paragraphs and 190 current paragraphs.
71 unchanged; 46 reworded; 61 added; 14 removed; 4 previous and 12 current paragraphs rearranged.
Tables are not compared: 9 previous and 15 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (61)
Current report
Mattel's second quarter and first half net sales declined 1% compared to the second quarter and first half of 2023. Mattel's second quarter results included an improvement to operating cash flows, as well as gross margin expansion to 49.2%, from 45.1% in the second quarter of 2023, with benefits from the Optimizing for Profitable Growth program ("OPG program"), cost deflation, lower sales adjustments, and lower inventory management costs. Earnings per share in the second quarter of 2024 increased to $0.17, compared to $0.08 in the second quarter of 2023.
Current report
Additionally, in July 2024, Mattel entered into a new $1.40 billion revolving credit facility (the "New Revolving Credit Facility"), which replaced its prior revolving credit facility (the "Prior Revolving Credit Facility"). The New Revolving Credit Facility matures in July 2029.
Current report
Results of Operations—Second Quarter
Current report
Net sales in the second quarter of 2024 were $1.08 billion, a decrease of $7.4 million, or 1%, as compared to $1.09 billion in the second quarter of 2023. The decrease in net sales was due to a decrease in gross billings of $26.2 million, partially offset by a decrease in sales adjustments of $18.7 million.
Current report
Gross billings were $1.20 billion in the second quarter of 2024, a decrease of $26.2 million, or 2%, as compared to $1.23 billion in the second quarter of 2023. The decrease in gross billings was primarily due to lower billings of Dolls and Infant, Toddler, and Preschool products, partially offset by higher billings of Vehicles and Action Figures, Building Sets, Games, and Other products.
Current report
Dolls gross billings decreased 6%, of which 4% was due to lower billings of Barbie and 2% was due to lower billings of Disney Princess and Disney Frozen products.
Current report
Vehicles gross billings increased 2%, due to higher billings of Hot Wheels products.
Current report
Action Figures, Building Sets, Games, and Other gross billings increased 1%, of which 8% was due to higher billings of Games products, partially offset by lower billings of Action Figures products of 5%.
Current report
Gross margin increased to 49.2% in the second quarter of 2024 from 45.1% in the second quarter of 2023. The increase in gross margin included realized savings from the OPG program of 120 basis points, cost deflation of 110 basis points, lower sales adjustments of 60 basis points, lower inventory management costs of 40 basis points, including lower inventory obsolescence and close-out sales, and favorability from other factors of 80 basis points.
Current report
Other selling and administrative expenses were $373.8 million, or 34.6% of net sales, in the second quarter of 2024, an increase of $36.8 million, as compared to $337.0 million, or 31.0% of net sales, in the second quarter of 2023. The increase in other selling and administrative expenses was primarily due to market-related pay increases of $23.6 million and higher information technology and administrative costs of $14.9 million.
Current report
Interest income increased by $8.1 million to $12.4 million in the second quarter of 2024 from $4.3 million in the second quarter of 2023, primarily due to higher average invested cash balances in the second quarter of 2024.
Current report
Provision for Income Taxes
Current report
Mattel's provision for income taxes was an expense of $9.2 million in the second quarter of 2024, as compared to $14.4 million in the second quarter of 2023. The decrease in provision for income taxes was primarily due to higher discrete tax benefits and a change in the jurisdictional mix of income, partially offset by higher income before income taxes. During the second quarter of 2024, Mattel recognized a net discrete tax benefit of $4.5 million primarily related to reassessments of prior years' tax liabilities. During the second quarter of 2023, Mattel recognized a net discrete income tax expense of $0.2 million, primarily related to undistributed earnings of certain foreign subsidiaries and reassessments of prior years' tax liabilities.
Current report
Net sales for the North America segment in the second quarter of 2024 were $606.5 million, a decrease of $18.0 million, or 3%, as compared to $624.5 million in the second quarter of 2023. The decrease in net sales was primarily due to a decrease in gross billings of $18.8 million.
Current report
Dolls gross billings decreased 3%, primarily due to lower billings of Barbie.
Current report
Infant, Toddler, and Preschool gross billings decreased 7%, of which 8% was due to lower billings of Preschool Entertainment products and 6% was due to lower billings of Baby Gear and Power Wheels products, partially offset by higher billings of Fisher-Price products of 7%.
Current report
Action Figures, Building Sets, Games, and Other gross billings increased 3%, of which 6% was due to higher billings of Games products, partially offset by lower billings of Action Figures products of 2%.
Current report
Sales adjustments decreased to $40.4 million in the second quarter of 2024 from $41.2 million in the second quarter of 2023. Sales adjustments as a percentage of net sales was relatively consistent at 6.7% in the second quarter of 2024, as compared to 6.6% in the second quarter of 2023.
Current report
Cost of sales decreased by $29.2 million, or 8%, to $319.8 million in the second quarter of 2024 from $349.0 million in the second quarter of 2023, primarily due to a decrease in product and other costs of $29.0 million.
Current report
Dolls gross billings decreased 9%, of which 4% was due to lower billings of Barbie and 3% was due to lower billings of Disney Princess and Disney Frozen products.
Current report
Infant, Toddler, and Preschool gross billings increased 2%, of which 6% was due to higher billings of Fisher-Price products, partially offset by lower billings of Baby Gear and Power Wheels products of 3% and lower billings of Preschool Entertainment products of 1%.
Current report
Vehicles gross billings increased 7% due to higher billings of Hot Wheels products.
Current report
Action Figures, Building Sets, Games, and Other gross billings decreased 3%, of which 10% was due to lower billings of Action Figures products and 3% was due to lower billings of Other products, partially offset by higher billings of Games products of 10%.
Current report
Sales adjustments decreased to $81.2 million in the second quarter of 2024 from $99.1 million in the second quarter of 2023. Sales adjustments as a percentage of net sales decreased to 17.2% in the second quarter of 2024, as compared to 21.4% in the second quarter of 2023. The decrease in sales adjustments as a percentage of net sales was primarily due to $12.7 million of net foreign currency transaction losses from the remeasurement of certain accounts receivable denominated in foreign currencies in the second quarter of 2023.
Current report
Cost of sales decreased by $17.3 million, or 7%, to $247.9 million in the second quarter of 2024 from $265.1 million in the second quarter of 2023, primarily due to a decrease in product and other costs of $16.4 million.
Current report
Results of Operations—First Half
Current report
Consolidated Results
Current report
Sales
Current report
Net sales in the first half of 2024 were $1.89 billion, a decrease of $12.5 million, or 1%, as compared to $1.90 billion in the first half of 2023. The decrease in net sales was due to a decrease in gross billings of $38.6 million, partially offset by a decrease in sales adjustments of $26.1 million.
Current report
Gross billings were $2.10 billion in the first half of 2024, a decrease of $38.6 million, or 2%, as compared to $2.14 billion in the first half of 2023. The decrease in gross billings was primarily due to lower billings of Dolls and Infant, Toddler, and Preschool products, partially offset by higher billings of Vehicles products.
Current report
Vehicles gross billings increased 3%, primarily due to higher billings of Hot Wheels products.
Current report
Action Figures, Building Sets, Games, and Other gross billings were relatively flat year-over-year, with higher billings of Games products of 5%, substantially offset by lower billings of Action Figures products of 3% and lower billings of Other products of 3%.
Current report
Cost of Sales
Current report
Cost of sales decreased by $116.5 million, or 11%, to $969.6 million in the first half of 2024 from $1.09 billion in the first half of 2023. Within cost of sales, product and other costs decreased by $115.3 million, or 13%, to $745.2 million in the first half of 2024 from $860.6 million in the first half of 2023. Royalty expense decreased by $3.5 million to $83.8 million in the first half of 2024 from $87.3 million in the first half of 2023. Freight and logistics expenses increased by $2.4 million to $140.6 million in the first half of 2024, as compared to $138.3 million in the first half of 2023.
Current report
Gross Margin
Current report
Gross margin increased to 48.7% in the first half of 2024 from 42.9% in the first half of 2023. The increase in gross margin was primarily due to cost deflation of 160 basis points, incremental realized savings from the OPG program of 120 basis points, lower inventory management costs of 80 basis points, including lower inventory obsolescence and close-out sales, lower sales adjustments of 50 basis points, and favorability from other factors of 170 basis points.
Current report
Advertising and Promotion Expenses
Current report
Other Selling and Administrative Expenses
Current report
Interest Expense
Current report
Interest expense was $60.0 million in the first half of 2024, relatively flat as compared to $61.8 million in the first half of 2023.
Showing the first 40 of 61 passages. Open the source sections for the rest.
Removed paragraphs (14)
Previous report
Mattel's first quarter net sales were comparable with the prior year, declining 1% compared to the first quarter of 2023. Mattel's first quarter results included an improvement to operating cash flows and gross margin expansion, with significant contributions from lower inventory management costs, cost deflation, and cost savings. First quarter gross margin improved to 48.0%, from 40.0% in the first quarter of 2023.
Previous report
In the first quarter of 2024, Mattel announced an organizational change that resulted in the American Girl business being integrated into Mattel's North America commercial organization. Such integration resulted in a change to Mattel's operating and reportable segments. Mattel's new reportable segments are: (i) North America; and (ii) International.
Previous report
Results of Operations—First Quarter
Previous report
Net sales in the first quarter of 2024 were $809.5 million, a decrease of $5.1 million, or 1%, as compared to $814.6 million in the first quarter of 2023. The decrease in net sales was the result of a decrease in gross billings of $12.4 million, partially offset by a decrease in sales adjustments of $7.4 million.
Previous report
Infant, Toddler, and Preschool gross billings decreased 10%, of which 7% was due to lower billings of Baby Gear and Power Wheels products, and 3% was due to lower billings of Preschool Entertainment products.
Previous report
Vehicles gross billings increased 5%, due to higher billings of Hot Wheels products.
Previous report
Infant, Toddler, and Preschool gross billings decreased 8%, of which 11% was due to lower billings of Baby Gear and Power Wheels products, partially offset by higher billings of Fisher-Price products of 5%.
Previous report
Action Figures, Building Sets, Games, and Other gross billings increased 4%, of which 6% was due to higher billings of Action Figures products, partially offset by lower billings of Other products of 2%.
Previous report
Cost of sales decreased by $35.5 million, or 12%, to $257.1 million in the first quarter of 2024 from $292.6 million in the first quarter of 2023, due to a decrease in product and other costs of $37.8 million.
Previous report
Gross margin increased to 46.2% in the first quarter of 2024 from 37.8% in the first quarter of 2023. The increase in gross margin included lower inventory management costs of 370 basis points, including lower inventory obsolescence and close-out sales, cost deflation of 230 basis points, realized savings from the Optimizing for Profitable Growth program of 100 basis points, and favorable mix and other of 140 basis points.
Previous report
Net sales for the International segment in the first quarter of 2024 were $331.7 million, a decrease of $12.4 million, or 4%, as compared to $344.1 million in the first quarter of 2023. The decrease in net sales was the result of a decrease in gross billings of $16.1 million, partially offset by a decrease in sales adjustments of $3.7 million.
Previous report
Dolls gross billings decreased 7%, primarily due to lower billings of Disney Princess and Disney Frozen products of 7%, lower billings of Enchantimals products of 2%, and lower billings of Polly Pocket products of 2%, partially offset by higher billings of Monster High products of 5%.
Previous report
Cost of sales decreased by $17.6 million, or 9%, to $184.1 million in the first quarter of 2024 from $201.7 million in the first quarter of 2023, primarily due to a decrease in product and other costs of $15.7 million.
Previous report
Cash flows provided by operating activities were $35.5 million in the first three months of 2024, as compared to cash flows used for operating activities of $206.4 million in the first three months of 2023. The change was due to $165.3 million of improvements to working capital and favorable changes in net income, excluding the impact of non-cash items. The improvements to working capital included $206.0 million of favorability from changes to accounts receivable, partially offset by the impact of $40.6 million of unfavorable changes to inventories, and unfavorable changes in accounts payable, accrued liabilities, and income taxes payable of $19.1 million.
Reworded paragraphs (46)
Previous wording
During the first quarter of 2024, Mattel made additional progress to execute its multi-year strategy to grow its IP-driven toy business and expand its entertainment offering, as it expanded gross margin, generated positive cash flow from operations, and further improved its financial position.
Current wording
During the second quarter of 2024, Mattel made additional progress in executing its multi-year strategy to grow its IP-driven toy business and expand its entertainment offering, as it achieved gross margin expansion, continued to improve in profitability, and ended the quarter in a strong financial position.
Previous wording
Mattel ended the first quarter with a cash balance of $1.13 billion, compared to $461.7 million in the first quarter of 2023. Cash increased primarily due to Mattel's cash flows from operations, which were $1.11 billion in the trailing twelve months, driven by improved working capital, partially offset by cash used for capital expenditures and share repurchases.
Current wording
Mattel ended the second quarter with a cash balance of $722.4 million, compared to $299.9 million in the second quarter of 2023. Cash increased primarily due to Mattel's cash flows from operations, which were $978.0 million in the trailing twelve months, driven by improved working capital, partially offset by cash used for share repurchases and capital expenditures.
Previous wording
On February 5, 2024, the Board of Directors authorized a new $1.00 billion share repurchase program. During the first quarter, Mattel executed $100.0 million of share repurchases under the new program.
Current wording
On February 5, 2024, the Board of Directors authorized a $1.00 billion share repurchase program. During the first half of 2024, Mattel executed $200.0 million of share repurchases under the program.
Previous wording
The following table presents Mattel's consolidated results for the first quarter of 2024 and 2023:
Current wording
The following table presents Mattel's consolidated results for the second quarter of 2024 and 2023:
Previous wording
Gross billings represent amounts invoiced to a customer and do not include the impact of sales adjustments, such as trade discounts and other allowances. Changes in gross billings are discussed below because, while Mattel records the details of sales adjustments in its financial accounting systems at the time of sale, such sales adjustments are generally recorded by customer and are not associated with categories, brands, or individual products. The following tables provide a summary of Mattel's consolidated gross billings by categories, along with supplemental information by brand, for the first quarter of 2024 and 2023:
Current wording
Gross billings represent amounts invoiced to a customer and do not include the impact of sales adjustments, such as trade discounts and other allowances. Changes in gross billings are discussed below because, while Mattel records the details of sales adjustments in its financial accounting systems at the time of sale, such sales adjustments are generally recorded by customer and are not associated with categories, brands, or individual products. The following tables provide a summary of Mattel's consolidated gross billings by categories, along with supplemental information by brand, for the second quarter of 2024 and 2023:
Previous wording
Cost of sales decreased by $68.2 million, or 14%, to $420.6 million in the first quarter of 2024 from $488.8 million in the first quarter of 2023. Within cost of sales, product and other costs decreased by $67.7 million, or 18%, to $319.1 million in the first quarter of 2024 from $386.8 million in the first quarter of 2023. Royalty expense was relatively consistent at $36.1 million in the first quarter of 2024, as compared to $36.7 million in the first quarter of 2023. Freight and logistics expenses were relatively consistent at $65.5 million in the first quarter of 2024, as compared to $65.3 million in the first quarter of 2023.
Current wording
Cost of sales decreased by $48.4 million, or 8%, to $549.0 million in the second quarter of 2024 from $597.4 million in the second quarter of 2023. Within cost of sales, product and other costs decreased by $47.6 million, or 10%, to $426.2 million in the second quarter of 2024 from $473.8 million in the second quarter of 2023. Royalty expense decreased by $2.9 million to $47.7 million in the second quarter of 2024, as compared to $50.6 million in the second quarter of 2023. Freight and logistics expenses increased by $2.2 million to $75.2 million in the second quarter of 2024, as compared to $73.0 million in the second quarter of 2023.
Previous wording
Advertising and promotion expenses primarily consist of: (i) media costs, which include the media, planning, and buying fees for television, print, and online advertisements, (ii) non-media costs, which include commercial and website production, merchandising, and promotional costs, (iii) retail advertising costs, which include consumer direct catalogs; and (iv) generic advertising costs, which include trade show costs. Advertising and promotion expenses as a percentage of net sales were relatively flat at 8.8% in the first quarter of 2024, compared to 9.3% in the first quarter of 2023.
Current wording
Advertising and promotion expenses primarily consist of: (i) media costs, which include the media, planning, and buying fees for television, print, and online advertisements, (ii) non-media costs, which include commercial and website production, merchandising, and promotional costs, (iii) retail advertising costs, which include consumer direct catalogs; and (iv) generic advertising costs, which include trade show costs. Advertising and promotion expenses as a percentage of net sales decreased to 6.8% in the second quarter of 2024, as compared to 8.3% in the second quarter of 2023, primarily due to a shift in the timing of expected advertising and promotion programs to the second half of 2024.
Previous wording
Interest expense was $30.1 million in the first quarter of 2024, relatively flat as compared to $31.1 million in the first quarter of 2023.
Current wording
Interest expense was $30.0 million in the second quarter of 2024, relatively flat as compared to $30.6 million in the second quarter of 2023.
Previous wording
Evaluating the need for and the amount of a valuation allowance for deferred tax assets often requires significant judgment and extensive analysis of all available evidence to determine whether it is more-likely-than-not that these assets will be realizable. Mattel routinely assesses the positive and negative evidence for this realizability, including the evaluation of sustained profitability and three years of cumulative pretax income for each tax jurisdiction. During the three months ended March 31, 2024 and 2023, there were no changes to Mattel's valuation allowance.
Current wording
Evaluating the need for and the amount of a valuation allowance for deferred tax assets often requires significant judgment and extensive analysis of all available evidence to determine whether it is more-likely-than-not that these assets will be realizable. Mattel routinely assesses the positive and negative evidence for this realizability, including the evaluation of sustained profitability and three years of cumulative pretax income for each tax jurisdiction. For the second quarter of 2024 and 2023, there were no changes to Mattel's valuation allowance.
Previous wording
The following tables provide a summary of Mattel's net sales, segment operating income, and gross billings by categories, along with supplemental information by brand, for the North America segment for the first quarter of 2024 and 2023:
Current wording
The following tables provide a summary of Mattel's net sales, segment operating income, and gross billings by categories, along with supplemental information by brand, for the North America segment for the second quarter of 2024 and 2023:
Previous wording
Gross billings for the North America segment were $506.4 million in the first quarter of 2024, an increase of $3.6 million, or 1%, as compared to $502.8 million in the first quarter of 2023. The increase in the North America segment gross billings was due to higher billings of Vehicles and Action Figures, Building Sets, Games, and Other, partially offset by lower billings of Infant, Toddler, and Preschool and Dolls.
Current wording
Gross billings for the North America segment were $646.9 million in the second quarter of 2024, a decrease of $18.8 million, or 3%, as compared to $665.7 million in the second quarter of 2023. The decrease in the North America segment gross billings was due to lower billings of Infant, Toddler, and Preschool, Dolls, and Vehicles products, partially offset by higher billings of Action Figures, Building Sets, Games, and Other products.
Previous wording
Dolls gross billings decreased 1%, of which 2% was due to lower billings of Disney Princess and Disney Frozen products, partially offset by higher billings of Trolls products of 1%.
Current wording
Vehicles gross billings decreased 4%, of which 2% was due to lower billings of Matchbox products and 1% was due to lower billings of Hot Wheels products.
Previous wording
Gross margin increased to 48.0% in the first quarter of 2024 from 40.0% in the first quarter of 2023. The increase in gross margin included lower inventory management costs of 230 basis points, including lower inventory obsolescence and close-out sales, cost deflation of 220 basis points, realized savings from the Optimizing for Profitable Growth program of 120 basis points, favorable mix of 80 basis points, and favorable foreign currency exchange and other supply chain costs of 150 basis points.
Current wording
Gross margin increased to 47.3% in the second quarter of 2024 from 44.1% in the second quarter of 2023. The increase in gross margin included cost deflation of 150 basis points, realized savings from the OPG program of 110 basis points, and favorability from other factors of 60 basis points.
Previous wording
North America segment operating income was $73.0 million in the first quarter of 2024, as compared to segment operating income of $32.1 million in the first quarter of 2023, primarily due to higher gross profit of $42.8 million.
Current wording
North America segment operating income was $136.9 million in the second quarter of 2024, as compared to $132.4 million in the second quarter of 2023, due to higher gross profit of $11.2 million and lower advertising and promotion expenses of $6.3 million, partially offset by higher other selling and administrative expenses of $13.0 million.
Previous wording
The following tables provide a summary of Mattel's net sales, segment operating income, and gross billings by categories, along with supplemental information by brand, for the International segment for the first quarter of 2024 and 2023:
Current wording
The following tables provide a summary of Mattel's net sales, segment operating income, and gross billings by categories, along with supplemental information by brand, for the International segment for the second quarter of 2024 and 2023:
Previous wording
Net sales for the North America segment in the first quarter of 2024 were $477.8 million, an increase of $7.3 million, or 2%, as compared to $470.5 million in the first quarter of 2023. The increase in net sales was the result of a decrease in sales adjustments of $3.7 million and an increase in gross billings of $3.6 million.
Current wording
Net sales for the International segment in the second quarter of 2024 were $473.2 million, an increase of $10.5 million, or 2%, as compared to $462.7 million in the second quarter of 2023. The increase in net sales was due to a decrease in sales adjustments of $17.9 million, partially offset by a decrease in gross billings of $7.3 million.
Previous wording
Gross billings for the International segment were $392.5 million in the first quarter of 2024, a decrease of $16.1 million, or 4%, as compared to $408.6 million in the first quarter of 2023, with a favorable impact from changes in currency exchange rates of two percentage points. The decrease in the International segment gross billings was due to lower billings of Dolls, Infant, Toddler, and Preschool, and Action Figures, Building Sets, Games, and Other, partially offset by higher billings of Vehicles.
Current wording
Gross billings for the International segment were $554.5 million in the second quarter of 2024, a decrease of $7.3 million, or 1%, as compared to $561.8 million in the second quarter of 2023, with an unfavorable impact from changes in currency exchange rates of one percentage point. The decrease in the International segment gross billings was due to lower billings of Dolls and Action Figures, Building Sets, Games, and Other products, partially offset by higher billings of Vehicles and Infant, Toddler, and Preschool products.
Previous wording
Gross margin increased to 44.5% in the first quarter of 2024 from 41.4% in the first quarter of 2023. The increase in gross margin included favorable mix of 200 basis points, cost deflation of 190 basis points, realized savings from the Optimizing for Profitable Growth program of 140 basis points, lower inventory management costs of 80 basis points, including lower inventory obsolescence, partially offset by unfavorable foreign currency exchange and other supply chain costs of 300 basis points.
Current wording
Gross margin increased to 47.6% in the second quarter of 2024 from 42.7% in the second quarter of 2023. The increase in gross margin included lower sales adjustments of 160 basis points, realized savings from the OPG program of 140 basis points, lower inventory management costs of 80 basis points, including lower inventory obsolescence and close-out sales, cost deflation of 60 basis points, and favorable other supply chain costs of 140 basis points, partially offset by unfavorable foreign currency exchange of 90 basis points.
Previous wording
International segment operating income was $9.3 million in the first quarter of 2024, as compared to segment operating income of $0.3 million in the first quarter of 2023, primarily due to higher gross profit of $5.2 million and lower advertising and promotion expenses of $2.7 million.
Current wording
International segment operating income was $77.3 million in the second quarter of 2024, as compared to $42.9 million in the second quarter of 2023, primarily due to higher gross profit of $27.8 million and lower advertising and promotion expenses of $10.0 million.
Previous wording
Dolls gross billings decreased 4%, of which 5% was due to lower billings of Disney Princess and Disney Frozen products and 2% was due to lower billings of Polly Pocket products, partially offset by higher billings of Trolls products of 2%.
Current wording
Dolls gross billings decreased 5%, of which 3% was due to lower billings of Disney Princess and Disney Frozen products and 2% was due to lower billings of Barbie.
Previous wording
Infant, Toddler, and Preschool gross billings decreased 13%, of which 7% was due to lower billings of Fisher-Price products and 4% was due to lower billings of Preschool Entertainment products.
Current wording
Infant, Toddler, and Preschool gross billings decreased 6%, of which 6% was due to lower billings of Baby Gear and Power Wheels products and 4% was due to lower billings of Preschool Entertainment products, partially offset by higher billings of Fisher-Price products of 4%.
Previous wording
Sales adjustments generally represent arrangements with Mattel's customers to provide sales incentives, support customer promotions, and provide allowances for returns and defective merchandise. Such programs are based primarily on customer purchases, customer performance of specified promotional activities, and other specified factors such as sales to consumers. Additionally, sales adjustments may include foreign currency transaction gains and losses from the remeasurement of accounts receivable denominated in currencies that are different from the relevant entity’s functional currency. Sales adjustments decreased to $89.4 million in the first quarter of 2024, from $96.8 million in the first quarter of 2023. Sales adjustments as a percentage of net sales decreased to 11.0% in the first quarter of 2024, as compared to 11.9% in the first quarter of 2023. The decreased rate was due to a shift in sales channel mix resulting in a higher proportion of sales with lower average sales adjustment rates.
Current wording
Sales adjustments generally represent arrangements with Mattel's customers to provide sales incentives, support customer promotions, and provide allowances for returns and defective merchandise. Such programs are based primarily on customer purchases, customer performance of specified promotional activities, and other specified factors such as sales to consumers. Additionally, sales adjustments may include foreign currency transaction gains and losses from the remeasurement of accounts receivable denominated in currencies that are different from the relevant entity’s functional currency. Sales adjustments decreased to $211.0 million in the first half of 2024 from $237.1 million in the first half of 2023. Sales adjustments as a percentage of net sales decreased to 11.2% in the first half of 2024, as compared to 12.5% in the first half of 2023. The decrease in sales adjustments as a percentage of net sales was primarily due to $13.8 million of net foreign currency transaction losses from the remeasurement of certain accounts receivable denominated in foreign currencies in the first half of 2023 and a shift in sales channel mix resulting in a higher proportion of sales with lower average sales adjustment rates.
Previous wording
Other selling and administrative expenses were $352.9 million, or 43.6% of net sales, in the first quarter of 2024, a decrease of $11.8 million, as compared to $364.8 million, or 44.8% of net sales, in the first quarter of 2023. The decrease in other selling and administrative expenses was primarily due to lower severance and restructuring charges of $17.6 million and realized savings from cost savings programs of $8.1 million, partially offset by market-related pay increases of $9.1 million and information technology and administrative costs of $4.7 million.
Current wording
Other selling and administrative expenses were $726.8 million, or 38.5% of net sales, in the first half of 2024, an increase of $25.0 million, as compared to $701.8 million, or 36.9% of net sales, in the first half of 2023. The increase in other selling and administrative expenses was primarily due to market-related pay increases of $30.6 million and higher information technology and administrative costs of $21.4 million, partially offset by lower severance and restructuring charges of $17.0 million, and realized savings from cost savings programs of $16.0 million.
Previous wording
Interest income increased by $10.8 million to $17.3 million in the first quarter of 2024 from $6.5 million in the first quarter of 2023, primarily due to higher average invested cash in the first quarter of 2024.
Current wording
Interest income increased by $18.8 million to $29.7 million in the first half of 2024 from $10.8 million in the first half of 2023, primarily due to higher average invested cash balances in the first half of 2024.
Previous wording
Mattel's benefit from income taxes was $20.8 million in the first quarter of 2024, compared to a benefit of $27.0 million in the first quarter of 2023. During the three months ended March 31, 2024, Mattel recognized a net discrete tax benefit of $8.4 million primarily related to tax elections filed to amortize certain intangible assets transferred as part of Mattel's intra-group IP rights transfer, partially offset by reassessments of prior years' tax liabilities. During the three months ended March 31, 2023, Mattel recognized a net discrete income tax expense of $0.1 million, primarily related to $1.8 million of reassessments of prior years' tax liabilities, partially offset by undistributed earnings of certain foreign subsidiaries.
Current wording
Mattel's benefit from income taxes was $11.6 million for the first half of 2024, as compared to $12.6 million for the first half of 2023. The decrease in benefit for income taxes was due to higher income before income taxes, offset by higher discrete tax benefits. During the first half of 2024, Mattel recognized a net discrete tax benefit of $12.9 million, primarily related to tax elections filed to amortize certain intangible assets transferred as part of Mattel's intra-group IP rights transfer and reassessments of prior years' tax liabilities. During the first half of 2023, Mattel recognized a net discrete income tax expense of $0.3 million, primarily related to undistributed earnings of certain foreign subsidiaries and reassessments of prior years' tax liabilities.
Previous wording
Gross billings were $898.9 million in the first quarter of 2024, a decrease of $12.4 million, or 1%, as compared to $911.3 million in the first quarter of 2023, with a favorable impact from changes in currency exchange rates of one percentage point. The decrease in gross billings was primarily due to lower billings of Infant, Toddler, and Preschool and Dolls, partially offset by higher billings of Vehicles.
Current wording
Gross billings for the North America segment were $1.15 billion in the first half of 2024, a decrease of $15.2 million, or 1%, as compared to $1.17 billion in the first half of 2023. The decrease in gross billings was primarily due to lower billings of Infant, Toddler, and Preschool and Dolls, partially offset by higher billings of Action Figures, Building Sets, Games, and Other.
Previous wording
Action Figures, Building Sets, Games, and Other gross billings were flat year-over-year.
Current wording
Vehicles gross billings were flat year-over-year.
Previous wording
Vehicles gross billings increased 4%, due to higher billings of Hot Wheels products.
Current wording
Action Figures, Building Sets, Games, and Other gross billings increased 4% due to higher billings of Games products.
Previous wording
Sales adjustments decreased to $60.8 million in the first quarter of 2024 from $64.5 million in the first quarter of 2023, primarily due to lower gross billings. Sales adjustments as a percentage of net sales were relatively flat at 18.3% in the first quarter of 2024, as compared to 18.7% in the first quarter of 2023.
Current wording
Sales adjustments decreased to $69.0 million in the first half of 2024 from $73.5 million in the first half of 2023, primarily due to lower gross billings. Sales adjustments as a percentage of net sales were relatively consistent at 6.4% for the first half of 2024, as compared to 6.7% for the first half of 2023.
Previous wording
Action Figures, Building Sets, Games, and Other gross billings decreased 7%, of which 9% was due to lower billings of Action Figures products, partially offset by higher billings of Games products of 4%.
Current wording
Action Figures, Building Sets, Games, and Other gross billings decreased 5%, of which 9% was due to lower billings of Action Figures products and 3% was due to lower billings of Other products, partially offset by higher billings of Games products of 8%.
Previous wording
On February 7, 2024, Mattel announced the OPG program, a multi-year cost savings program that follows the OFG program, which concluded in the fourth quarter of 2023. The OPG program is designed to achieve further efficiency and cost savings opportunities, primarily within Mattel’s global supply chain, including its manufacturing footprint. The OPG program includes cost savings actions in connection with discontinuing production at a plant in China as previously announced in the third quarter of 2023, as well as savings from other previous actions that were not recognized in the OFG program. Targeted annual gross cost savings from actions associated with the OPG program, which are expected to be completed by 2026, are $200 million. Of the $200 million in targeted annual gross costs savings, approximately 70% is expected to benefit cost of sales and 30% is expected to benefit other selling and administrative expenses. Total expected cash expenditures under the OPG program are expected to be between $130 and $165 million and total non-cash charges are expected to be up to $5 million.
Current wording
On February 7, 2024, Mattel announced the OPG program, a multi-year cost savings program that follows the Optimizing for Growth program (the "OFG program"), which concluded in the fourth quarter of 2023. The OPG program is designed to achieve further efficiency and cost savings opportunities, primarily within Mattel’s global supply chain, including its manufacturing footprint. The OPG program includes cost savings actions in connection with discontinuing production at a plant in China as previously announced in the third quarter of 2023, as well as savings from other previous actions that were not recognized in the OFG program. Targeted annual gross cost savings from actions associated with the OPG program, which are expected to be completed by 2026, are $200 million. Of the $200 million in targeted annual gross costs savings, approximately 70% is expected to benefit cost of sales and 30% is expected to benefit other selling and administrative expenses. Total expected cash expenditures under the OPG program are expected to be between $130 and $165 million and total non-cash charges are expected to be up to $5 million.
Previous wording
As of March 31, 2024, Mattel has recorded cumulative severance and other restructuring charges related to the OPG program of approximately $35 million, which includes approximately $0.4 million of non-cash charges. Mattel realized cumulative cost savings (before severance, restructuring costs, and cost inflation) of approximately $17 million, which represents approximately 55% benefit to cost of sales, and 45% benefit to other selling and administrative expenses, as of
Current wording
As of June 30, 2024, Mattel has recorded cumulative severance and other restructuring charges related to the OPG program of approximately $46 million, which includes approximately $1 million of non-cash charges. Mattel realized cumulative cost savings (before severance, restructuring costs, and cost inflation) of approximately $37 million, which represents approximately 60% benefit to cost of sales, and 40% benefit to other selling and administrative expenses, as of June 30, 2024, in connection with the OPG Program.
Previous wording
As of December 31, 2023, Mattel concluded the OFG program, which was a multi-year cost savings program that had integrated and expanded upon the previous Capital Light program. The OFG program, excluding previous actions taken under the Capital Light program, had realized gross annual cost savings of approximately $343 million upon conclusion of the program. In the first three months of 2023, Mattel recorded severance expense of $20.7 million within other selling and administrative expenses in the consolidated statement of operations related to the OFG program.
Current wording
As of December 31, 2023, Mattel concluded the OFG program, which was a multi-year cost savings program that had integrated and expanded upon the previous Capital Light program. The OFG program, excluding previous actions taken under the Capital Light program, had realized gross annual cost savings of approximately $343 million upon conclusion of the program. In connection with the OFG program, Mattel recorded severance and other restructuring charges of $7.8 million and $28.5 million within other selling and administrative expenses during the three and six months ended June 30, 2023, respectively, and a credit to severance and restructuring charges of ($1.2) million within cost of sales during the three and six months ended June 30, 2023 in the consolidated statement of operations.
Previous wording
Additionally, during the first three months of 2023, Mattel executed actions to further streamline its organizational structure that were not included in the OFG program, and recorded severance costs of $3.2 million in connection with these actions within other selling and administrative expenses in the consolidated statement of operations.
Current wording
Additionally, during the three and six months ended June 30, 2023, Mattel executed actions to further streamline its organizational structure that were not included in the OFG program. In connection with these actions, Mattel recorded severance charges of $2.0 million and $5.2 million within other selling and administrative expenses during the three and six months ended June 30, 2023, respectively, in the consolidated statement of operations.
Previous wording
Mattel's primary sources of liquidity are its domestic and foreign cash and equivalents balances, short-term borrowing facilities, including its $1.40 billion senior secured revolving credit facility (the "Revolving Credit Facility"), and access to capital markets to fund its operations and obligations. Such obligations may include capital expenditures, debt service, future royalty payments pursuant to licensing agreements, future inventory and service purchases, and required cash contributions and payments related to benefit plans. Of Mattel's $1.13 billion in cash and equivalents at March 31, 2024, $701.4 million was held by foreign subsidiaries, including $56.8 million held in Russia. Mattel's cash held in Russia can be used within the country; however, its movement out of Russia is currently limited. In early 2022, Mattel paused all shipments into Russia.
Current wording
Mattel's primary sources of liquidity are its domestic and foreign cash and equivalents balances, short-term borrowing facilities, including its $1.40 billion New Revolving Credit Facility, which on July 15, 2024 replaced the Prior Revolving Credit Facility, and access to capital markets to fund its operations and obligations. Such obligations may include capital expenditures, debt service, future royalty payments pursuant to licensing agreements, future inventory and service purchases, and required cash contributions and payments related to benefit plans. Of Mattel's $722.4 million in cash and equivalents at June 30, 2024, $562.4 million was held by foreign subsidiaries, including $62.4 million held in Russia. Mattel's cash held in Russia can be used within the country; however, its movement out of Russia is currently limited. In early 2022, Mattel paused all shipments into Russia.
Previous wording
Cash flows from operating activities could be negatively impacted by decreased demand for Mattel's products, which could result from factors such as, but not limited to, adverse economic conditions and changes in public and consumer preferences, or by increased costs associated with manufacturing and distribution of products or shortages in raw materials or component parts. Additionally, Mattel's ability to issue long-term debt and obtain seasonal financing could be adversely affected by factors such as, but not limited to, global economic crises and tight credit environments, an inability to comply with its debt covenants and its Revolving Credit Facility covenants, or deterioration of Mattel's credit ratings. However, based on Mattel's current business plan and factors known to date, it is expected that existing cash and equivalents, cash flows from operations, availability under the Revolving Credit Facility, and access to capital markets will be sufficient to meet working capital and operating expenditure requirements for the next twelve months and in the long-term.
Current wording
Cash flows from operating activities could be negatively impacted by decreased demand for Mattel's products, which could result from factors such as, but not limited to, adverse economic conditions and changes in public and consumer preferences, or by increased costs associated with manufacturing and distribution of products or shortages in raw materials or component parts. Additionally, Mattel's ability to issue long-term debt and obtain seasonal financing could be adversely affected by factors such as, but not limited to, global economic crises and tight credit environments, an inability to comply with its debt covenants and its New Revolving Credit Facility covenants, or deterioration of Mattel's credit ratings. However, based on Mattel's current business plan and factors known to date, it is expected that existing cash and equivalents, cash flows from operations, availability under the New Revolving Credit Facility, and access to capital markets will be sufficient to meet working capital and operating expenditure requirements for the next twelve months and in the long-term.
Previous wording
Mattel intends to utilize its existing cash and cash equivalents, cash flow from operations, and borrowings under the Revolving Credit Facility to meet its short-term liquidity needs. At March 31, 2024, Mattel had no outstanding borrowings under the Revolving Credit Facility and approximately $9 million in outstanding letters of credit under the Revolving Credit Facility.
Current wording
Mattel intends to utilize its existing cash and cash equivalents, cash flow from operations, and borrowings under the New Revolving Credit Facility to meet its short-term liquidity needs. At June 30, 2024, Mattel had no outstanding borrowings under the Prior Revolving Credit Facility and approximately $9 million in outstanding letters of credit under the Prior Revolving Credit Facility.
Previous wording
Cash flows used for investing activities were $28.4 million in the first three months of 2024, as compared to $42.5 million in the first three months of 2023. The change was primarily due to lower capital expenditures of $12.5 million in the first three months of 2023.
Current wording
Cash flows used for investing activities were $72.7 million in the first half of 2024, as compared to $62.0 million in the first half of 2023. The change was primarily due to lower proceeds from foreign currency forward exchange contracts of $12.2 million in the first half of 2024.
Previous wording
Cash flows used for financing activities were $131.3 million in the first three months of 2024, as compared to $53.2 million in the first three months of 2023. The change was primarily due to $66.0 million of increased share repurchases in the first three months of 2024 as compared to the first three months of 2023.
Current wording
Cash flows used for financing activities were $240.0 million in the first half of 2024, as compared to $71.4 million in the first half of 2023. The change was primarily due to $150.1 million of increased share repurchases in the first half of 2024 as compared to the first half of 2023.
Previous wording
Mattel's cash and equivalents decreased $131.1 million to $1.13 billion at March 31, 2024 from $1.26 billion at December 31, 2023, primarily due to $100.0 million of share repurchases and capital expenditures of $30.5 million during the three months ended March 31, 2024. Mattel's cash and equivalents increased $668.5 million to $1.13 billion at March 31, 2024 from $461.7 million at March 31, 2023, primarily due to cash flows generated from operating activities of $1.11 billion in the trailing twelve months, partially offset by $269.0 million of share repurchases and $147.8 million of capital expenditures in the trailing twelve months.
Current wording
Mattel's cash and equivalents decreased $539.0 million to $722.4 million at June 30, 2024 from $1.26 billion at December 31, 2023, primarily due to cash flows used for operating activities of $217.4 million, share repurchases of $200.0 million and capital expenditures of $65.4 million during the six months ended June 30, 2024. Mattel's cash and equivalents increased $422.5 million to $722.4 million at June 30, 2024 from $299.9 million at June 30, 2023, primarily due to cash flows generated from operating activities of $978.0 million in the trailing twelve months, partially offset by $353.1 million of share repurchases and $152.3 million of capital expenditures in the trailing twelve months.
Showing the first 40 of 46 pairs. Open the source sections for the rest.
Rearranged current paragraphs (12)
Current report — wording carried from elsewhere
Infant, Toddler, and Preschool gross billings decreased 4%, of which 5% was due to lower billings of Preschool Entertainment products and 5% was due to lower billings of Baby Gear and Power Wheels products, partially offset by higher billings of Fisher-Price products of 6%.
Current report — wording carried from elsewhere
Sales adjustments generally represent arrangements with Mattel's customers to provide sales incentives, support customer promotions, and provide allowances for returns and defective merchandise. Such programs are based primarily on customer purchases, customer performance of specified promotional activities, and other specified factors such as sales to consumers. Additionally, sales adjustments may include foreign currency transaction gains and losses from the remeasurement of accounts receivable denominated in currencies that are different from the relevant entity’s functional currency. Sales adjustments decreased to $121.6 million in the second quarter of 2024, from $140.3 million in the second quarter of 2023. Sales adjustments as a percentage of net sales decreased to 11.3% in the second quarter of 2024, as compared to 12.9% in the second quarter of 2023. The decrease in sales adjustments as a percentage of net sales was primarily due to $12.7 million of net foreign currency transaction losses from the remeasurement of certain accounts receivable denominated in foreign currencies in the second quarter of 2023.
Current report — wording carried from elsewhere
The following table presents Mattel's consolidated results for the first half of 2024 and 2023:
Current report — wording carried from elsewhere
Gross billings represent amounts invoiced to a customer and do not include the impact of sales adjustments, such as trade discounts and other allowances. Changes in gross billings are discussed below because, while Mattel records the details of sales adjustments in its financial accounting systems at the time of sale, such sales adjustments are generally recorded by customer and are not associated with categories, brands, or individual products. The following tables provide a summary of Mattel's consolidated gross billings by categories, along with supplemental information by brand, for the first half of 2024 and 2023:
Current report — wording carried from elsewhere
(a)Beginning in the first quarter of 2024, the Fisher-Price power brand was revised to exclude Baby Gear and Imaginext products. Prior period amounts have been reclassified to conform to the current presentation.
Current report — wording carried from elsewhere
Advertising and promotion expenses primarily consist of: (i) media costs, which include the media, planning, and buying fees for television, print, and online advertisements, (ii) non-media costs, which include commercial and website production, merchandising, and promotional costs, (iii) retail advertising costs, which include consumer direct catalogs; and (iv) generic advertising costs, which include trade show costs. Advertising and promotion expenses as a percentage of net sales decreased to 7.7% in the first half of 2024, as compared to 8.7% in the first half of 2023, primarily due to a shift in the timing of expected advertising and promotion programs to the second half of 2024.
Current report — wording carried from elsewhere
Evaluating the need for and the amount of a valuation allowance for deferred tax assets often requires significant judgment and extensive analysis of all available evidence to determine whether it is more-likely-than-not that these assets will be realizable. Mattel routinely assesses the positive and negative evidence for this realizability, including the evaluation of sustained profitability and three years of cumulative pretax income for each tax jurisdiction. For the first half of 2024 and 2023, there were no changes to Mattel's valuation allowance.
Current report — wording carried from elsewhere
The OECD reached an agreement among various countries to implement a minimum 15% tax rate on certain multinational enterprises, commonly referred to as Pillar Two. Many countries continue to announce changes in their tax laws and regulations based on the Pillar Two rules. Mattel is continuing to evaluate the impact of these proposed and enacted legislative changes as new guidance becomes available. Some of the legislative changes could impact Mattel's effective tax rate and tax liabilities. When and how these laws and regulations are adopted or enacted by various countries in which Mattel operates could increase tax complexity and uncertainty and may adversely affect Mattel's worldwide effective tax rate, income tax expense and cash flows. Mattel does not expect the provisions effective in 2024 to have a materially adverse impact on its results of operations, financial position, or cash flows.
Current report — wording carried from elsewhere
Beginning in the first quarter of 2024, Mattel's American Girl business was integrated into its North America commercial organization and is reported within the North America operating segment. Prior to the first quarter of 2024, Mattel's American Girl business was a separate reportable operating segment. Prior period amounts have been reclassified to conform to the current period presentation.
Current report — wording carried from elsewhere
(a)Beginning in the first quarter of 2024, the Fisher-Price power brand was revised to exclude Baby Gear and Imaginext products. Prior period amounts have been reclassified to conform to the current presentation.
Current report — wording carried from elsewhere
(a)Beginning in the first quarter of 2024, the Fisher-Price power brand was revised to exclude Baby Gear and Imaginext products. Prior period amounts have been reclassified to conform to the current presentation.
Current report — wording carried from elsewhere
Dolls gross billings decreased 8%, of which 5% was due to lower billings of Disney Princess and Disney Frozen products and 3% was due to lower billings of Barbie.
Rearranged previous paragraphs (4)
Previous report — wording carried elsewhere
Additionally, in February 2024, Mattel announced the Optimizing for Profitable Growth program (the "OPG program"), a multi-year cost savings program that follows the Optimizing for Growth program (the "OFG program"). The OPG program is designed to achieve further efficiency and cost savings opportunities, primarily within Mattel's global supply chain, with targeted annual gross cost savings of $200.0 million between 2024 and 2026.
Previous report — wording carried elsewhere
Vehicles gross billings increased 6%, of which 5% was due to higher billings of Hot Wheels products.
Previous report — wording carried elsewhere
Sales adjustments decreased to $28.6 million in the first quarter of 2024 from $32.3 million in the first quarter of 2023. Sales adjustments as a percentage of net sales decreased to 6.0% in the first quarter of 2024, as compared to 6.9% in the first quarter of 2023, due to a shift in sales channel mix resulting in a higher proportion of sales with lower average sales adjustment rates.
Previous report — wording carried elsewhere
March 31, 2024, in connection with the OPG Program.