MATTEL INC DE
For the period ended Sep 30, 2024. Filed Oct 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.
Sep 30, 2024 · Filed Oct 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 2024-06-30; filed 2024-07-30.
0001628280-24-033454
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-09-30; filed 2024-10-30.
0001628280-24-044151
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 190 previous paragraphs and 189 current paragraphs.
87 unchanged; 62 reworded; 40 added; 39 removed; 2 previous and 0 current paragraphs rearranged.
Tables are not compared: 15 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 (40)
Current report
Results of Operations—Third Quarter
Current report
Net sales in the third quarter of 2024 were $1.84 billion, a decrease of $74.9 million, or 4%, as compared to $1.92 billion in the third quarter of 2023. The decrease in net sales was primarily due to a decrease in gross billings of $70.6 million.
Current report
Gross billings were $2.05 billion in the third quarter of 2024, a decrease of $70.6 million, or 3%, as compared to $2.12 billion in the third quarter of 2023, with an unfavorable impact from changes in currency exchange rates of one percentage point. 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 14%, of which 12% was due to lower billings of Barbie, which benefited from the Barbie movie in the prior year, and 2% was due to lower billings of Trolls (NBCUniversal) products.
Current report
Vehicles gross billings increased 12%, primarily due to higher billings of Hot Wheels products.
Current report
Gross margin increased to 53.1% in the third quarter of 2024 from 51.0% in the third quarter of 2023. The increase in gross margin included supply chain and other efficiencies of 190 basis points, incremental realized savings from the OPG program of 80 basis points, favorable foreign currency exchange of 70 basis points, and cost deflation of 50 basis points, partially offset by unfavorable mix of 180 basis points.
Current report
Net sales for the North America segment in the third quarter of 2024 were $1.11 billion, a decrease of $38.7 million, or 3%, as compared to $1.15 billion in the third quarter of 2023. The decrease in net sales was primarily due to a decrease in gross billings of $36.6 million.
Current report
Dolls gross billings decreased 14%, primarily due to lower billings of Barbie, which benefited from the Barbie movie in the prior year.
Current report
Infant, Toddler, and Preschool gross billings decreased 1%, due to lower billings of Baby Gear and Power Wheels products.
Current report
Vehicles gross billings increased 10%, primarily due to higher billings of Hot Wheels products.
Current report
Action Figures, Building Sets, Games, and Other gross billings increased 5%, of which 8% was due to higher billings of Games products and 3% was due to higher billings of Action Figures products, partially offset by lower billings of Building Sets products of 3% and lower billings of Other products of 3%.
Current report
Gross margin increased to 51.7% in the third quarter of 2024 from 50.0% in the third quarter of 2023. The increase in gross margin included supply chain and other efficiencies of 200 basis points, incremental realized savings from the OPG program of 80 basis points, and cost deflation of 60 basis points, partially offset by unfavorable mix of 170 basis points.
Current report
Net sales for the International segment in the third quarter of 2024 were $735.6 million, a decrease of $36.2 million, or 5%, as compared to $771.8 million in the third quarter of 2023. The decrease in net sales was primarily due to a decrease in gross billings of $34.1 million.
Current report
Dolls gross billings decreased 15%, of which 11% was due to lower billings of Barbie, which benefited from the Barbie movie in the prior year, 2% was due to lower billings of Polly Pocket products, and 2% was due to lower billings of Trolls (NBCUniversal)products.
Current report
Vehicles gross billings increased 14%, primarily due to higher billings of Hot Wheels products.
Current report
Sales adjustments increased to $131.2 million in the third quarter of 2024 from $129.1 million in the third quarter of 2023. Sales adjustments as a percentage of net sales increased to 17.8% in the third quarter of 2024, as compared to 16.7% in the third quarter of 2023. The increase in sales adjustments as a percentage of net sales was primarily due to a shift in sales channel mix resulting in a higher proportion of sales with higher average sales adjustment rates.
Current report
Cost of sales decreased by $43.8 million, or 11%, to $355.6 million in the third quarter of 2024 from $399.4 million in the third quarter of 2023, primarily due to a decrease in product and other costs of $42.2 million.
Current report
Gross margin increased to 51.7% in the third quarter of 2024 from 48.3% in the third quarter of 2023. The increase in gross margin included favorable foreign currency exchange of 250 basis points, supply chain and other efficiencies of 220 basis points, incremental realized savings from the OPG program of 80 basis points, and cost deflation of 30 basis points, partially offset by unfavorable mix of 240 basis points.
Current report
Results of Operations—First Nine Months
Current report
Net sales in the first nine months of 2024 were $3.73 billion, a decrease of $87.4 million, or 2%, as compared to $3.82 billion in the first nine months of 2023. The decrease in net sales was due to a decrease in gross billings of $109.2 million, partially offset by a decrease in sales adjustments of $21.8 million.
Current report
Gross billings were $4.15 billion in the first nine months of 2024, a decrease of $109.2 million, or 3%, as compared to $4.26 billion in the first nine months 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 10%, of which 7% was due to lower billings of Barbie, which benefited from the Barbie movie in the prior year, and 2% was due to lower billings of Disney Princess and Disney Frozen products.
Current report
Vehicles gross billings increased 7%, primarily due to higher billings of Hot Wheels products.
Current report
Gross margin increased to 50.9% in the first nine months of 2024 from 46.9% in the first nine months of 2023. The increase in gross margin was primarily due to supply chain and other efficiencies of 270 basis points, cost deflation of 100 basis points, incremental realized savings from the OPG program of 100 basis points, and favorable foreign currency exchange of 30 basis points, partially offset by unfavorable mix of 100 basis points.
Current report
Provision for Income Taxes
Current report
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 nine months of 2024 and 2023:
Current report
Net sales for the North America segment in the first nine months of 2024 were $2.19 billion, a decrease of $49.3 million, or 2%, as compared to $2.24 billion in the first nine months of 2023. The decrease in net sales was primarily due to a decrease in gross billings of $51.8 million.
Current report
Gross billings for the North America segment were $2.34 billion in the first nine months of 2024, a decrease of $51.8 million, or 2%, as compared to $2.39 billion in the first nine months 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
Vehicles gross billings increased 5%, primarily due to higher billings of Hot Wheels products.
Current report
Action Figures, Building Sets, Games, and Other gross billings increased 5%, of which 6% was due to higher billings of Games products and 3% was due to higher billings of Action Figures products, partially offset by lower billings of Building Sets products of 2% and lower billings of Other products of 2%.
Current report
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 nine months of 2024 and 2023:
Current report
Net sales for the International segment in the first nine months of 2024 were $1.54 billion, a decrease of $38.0 million, or 2%, as compared to $1.58 billion in the first nine months 2023. The decrease in net sales was due to a decrease in gross billings of $57.5 million, partially offset by a decrease in sales adjustments of $19.4 million.
Current report
Gross billings for the International segment were $1.81 billion in the first nine months of 2024, a decrease of $57.5 million, or 3%, as compared to $1.87 billion in the first nine months of 2023, with an unfavorable impact from changes in currency exchange rates of one percentage point. The decrease in gross billings was due to lower billings of Dolls, Infant, Toddler, and Preschool, and Action Figures, Building Sets, Games, and Other products, partially offset by higher billings of Vehicles products.
Current report
Dolls gross billings decreased 12%, of which 7% was due to lower billings of Barbie, which benefited from the Barbie movie in the prior year, and 3% was due to lower billings of Disney Princess and Disney Frozen products.
Current report
Vehicles gross billings increased 9%, primarily due to higher billings of Hot Wheels products.
Current report
Action Figures, Building Sets, Games, and Other gross billings decreased 4%, of which 6% was due to lower billings of Action Figures products, 3% was due to lower billings of Other products, and 2% was due to lower billings of Building Sets products, partially offset by higher billings of Games products of 7%.
Current report
Sales adjustments decreased to $273.2 million in the first nine months of 2024 from $292.7 million in the first nine months of 2023. Sales adjustments as a percentage of net sales decreased to 17.7% for the first nine months of 2024, as compared to 18.5% for the first nine months of 2023. The decrease in sales adjustments as a percentage of net sales was primarily due to $15.9 million of net foreign currency transaction losses from the remeasurement of certain accounts receivable denominated in foreign currencies in the first nine months of 2023.
Current report
Cost of sales decreased by $78.6 million, or 9%, to $787.5 million in the first nine months of 2024 from $866.1 million in the first nine months of 2023, primarily due to a decrease in product and other costs of $74.3 million.
Current report
International segment operating income increased by $58.5 million to $304.3 million in the first nine months of 2024, as compared to $245.8 million in the first nine months of 2023, primarily due to higher gross profit of $40.6 million and lower advertising and promotion expenses of $16.9 million.
Current report
Accounts receivable increased $395.5 million to $1.48 billion at September 30, 2024 from $1.08 billion at December 31, 2023, primarily due to the seasonality of Mattel's business. Accounts receivable decreased by $93.7 million to $1.48 billion at September 30, 2024 from $1.57 billion at September 30, 2023, primarily due to lower sales in the third quarter of 2024 as compared to the third quarter of 2023.
Removed paragraphs (39)
Previous report
Results of Operations—Second Quarter
Previous 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.
Previous 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.
Previous report
Vehicles gross billings increased 2%, due to higher billings of Hot Wheels products.
Previous 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.
Previous 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.
Previous report
Dolls gross billings decreased 3%, primarily due to lower billings of Barbie.
Previous 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%.
Previous report
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 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%.
Previous report
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 report
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 report
Vehicles gross billings increased 7% due to higher billings of Hot Wheels products.
Previous 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.
Previous report
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 report
Results of Operations—First Half
Previous report
N/M - not meaningful
Previous 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.
Previous 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.
Previous report
Vehicles gross billings increased 3%, primarily due to higher billings of Hot Wheels products.
Previous 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%.
Previous 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.
Previous report
Benefit from Income Taxes
Previous report
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 half of 2024 and 2023:
Previous report
Net sales for the North America segment in the first half of 2024 were $1.08 billion, a decrease of $10.7 million, or 1%, as compared to $1.09 billion in the first half of 2023. The decrease in net sales was due to a decrease in gross billings of $15.2 million, partially offset by a decrease in sales adjustments of $4.5 million.
Previous report
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 report
Vehicles gross billings were flat year-over-year.
Previous report
Action Figures, Building Sets, Games, and Other gross billings increased 4% due to higher billings of Games products.
Previous report
Cost of sales decreased by $64.7 million, or 10%, to $576.9 million in the first half of 2024 from $641.6 million in the first half of 2023, primarily due to a decrease in product and other costs of $66.8 million.
Previous report
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 half of 2024 and 2023:
Previous report
Net sales for the International segment were relatively consistent at $805.0 million in the first half of 2024, as compared to $806.8 million in the first half 2023. The decrease in gross billings was substantially offset by a decrease in sales adjustments in the first half of 2024.
Previous report
Gross billings for the International segment were $947.0 million in the first half of 2024, a decrease of $23.4 million, or 2%, as compared to $970.4 million in the first half of 2023. The decrease in gross billings was due to lower billings of Dolls, Action Figures, Building Sets, Games, and Other, and Infant, Toddler, and Preschool products, partially offset by higher billings of Vehicles products.
Previous report
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.
Previous report
Vehicles gross billings increased 6%, due to higher billings of Hot Wheels products.
Previous report
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 report
Sales adjustments decreased to $142.0 million in the first half of 2024 from $163.6 million in the first half of 2023. Sales adjustments as a percentage of net sales decreased to 17.6% for the first half of 2024, as compared to 20.3% for 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.
Previous report
Cost of sales decreased by $34.8 million, or 7%, to $431.9 million in the first half of 2024 from $466.8 million in the first half of 2023, primarily due to a decrease in product and other costs of $32.1 million.
Previous report
International segment operating income increased by $43.3 million to $86.6 million in the first half of 2024, as compared to $43.2 million in the first half of 2023, primarily due to higher gross profit of $33.0 million and lower advertising and promotion expenses of $12.7 million.
Previous report
Accounts receivable decreased $242.4 million to $839.4 million at June 30, 2024 from $1.08 billion at December 31, 2023, primarily due to seasonal declines as year-end receivables are collected. Accounts receivable decreased by $51.5 million to $839.4 million at June 30, 2024 from $890.9 million at June 30, 2023, primarily due to timing of sales and collections.
Reworded paragraphs (62)
Previous 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.
Current wording
During the third quarter of 2024, Mattel continued to execute its multi-year strategy to grow its IP-driven toy business and expand its entertainment offering. Mattel achieved gross margin expansion, continued to improve in profitability compared to the third quarter of 2023, and ended the quarter in a strong financial position.
Previous wording
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 wording
Mattel's third quarter net sales declined 4% compared to the third quarter of 2023, which benefited from the success of the Barbie movie. Mattel's third quarter results included improvement to operating cash flows, as well as gross margin expansion to 53.1%, from 51.0% in the third quarter of 2023, with benefits from supply chain and other efficiencies, the Optimizing for Profitable Growth program ("OPG program"), favorable foreign currency exchange, and cost deflation. Earnings per share in the third quarter of 2024 increased to $1.09, compared to $0.41 in the third quarter of 2023.
Previous 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.
Current wording
Mattel ended the third quarter with a cash balance of $723.5 million, compared to $455.7 million in the third quarter of 2023. Cash increased primarily due to Mattel's cash flows from operations, which were $887.8 million during the trailing twelve months, due to an increase in net income, excluding the impact of non-cash items, and improved working capital. This increase was partially offset by cash used for share repurchases and capital expenditures, including the acquisition of a property that will serve as Mattel's new global design center, which will replace a facility that is currently leased.
Previous 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.
Current wording
On February 5, 2024, the Board of Directors authorized a $1.00 billion share repurchase program. During the first nine months of 2024, Mattel executed $268.3 million of share repurchases under the program.
Previous wording
The following table presents Mattel's consolidated results for the second quarter of 2024 and 2023:
Current wording
The following table presents Mattel's consolidated results for the third 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 second 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 third quarter of 2024 and 2023:
Previous wording
Dolls gross billings decreased 3% due to lower billings of Disney Princess and Disney Frozen products.
Current wording
Infant, Toddler, and Preschool gross billings decreased 3%, due to lower billings of Baby Gear and Power Wheels products.
Previous wording
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 wording
Action Figures, Building Sets, Games, and Other gross billings increased 2%, of which 8% was due to higher billings of Games products, partially offset by lower billings of Other products of 3% and lower billings of Building Sets products of 3%.
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 $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.
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 increased to $207.2 million in the third quarter of 2024, from $203.0 million in the third quarter of 2023. Sales adjustments as a percentage of net sales increased to 11.2% in the third quarter of 2024, as compared to 10.6% in the third quarter of 2023. The increase in sales adjustments as a percentage of net sales was primarily due to a shift in sales channel mix resulting in a higher proportion of sales with higher average sales adjustment rates.
Previous 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.
Current wording
Cost of sales decreased by $75.9 million, or 8%, to $864.9 million in the third quarter of 2024 from $940.9 million in the third quarter of 2023. Within cost of sales, product and other costs decreased by $65.2 million, or 9%, to $696.1 million in the third quarter of 2024 from $761.3 million in the third quarter of 2023. Freight and logistics expenses decreased by $7.0 million, or 8%, to $84.9 million in the third quarter of 2024 from $92.0 million in the third quarter of 2023. Royalty expense decreased by $3.7 million, or 4%, to $83.9 million in the third quarter of 2024 from $87.6 million in the third 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 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.
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 5.7% in the third quarter of 2024, as compared to 6.5% in the third quarter of 2023, primarily due to a shift in the expected timing of advertising and promotion programs to the fourth quarter of 2024.
Previous wording
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 wording
Other selling and administrative expenses were $385.7 million, or 20.9% of net sales, in the third quarter of 2024, an increase of $5.9 million, as compared to $379.8 million, or 19.8% of net sales, in the third quarter of 2023. The increase in other selling and administrative expenses was primarily due to employee compensation increases and higher incentive compensation of $25.2 million, partially offset by realized savings from cost savings programs of $7.5 million.
Previous 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.
Current wording
Interest expense was $29.4 million in the third quarter of 2024, relatively flat as compared to $30.7 million in the third quarter of 2023.
Previous wording
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 wording
Interest income increased by $5.2 million to $9.8 million in the third quarter of 2024 from $4.6 million in the third quarter of 2023, primarily due to higher average invested cash balances in the third quarter of 2024.
Previous wording
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 wording
Mattel's provision for income taxes was $106.4 million in the third quarter of 2024, as compared to $309.3 million in the third quarter of 2023. The decrease in provision for income taxes was primarily due to changes in discrete income taxes. During the three months ended September 30, 2023, Mattel recognized a net discrete income tax expense of $200.7 million, which included the establishment of a valuation allowance of $212.4 million on certain foreign deferred tax assets during the third quarter of 2023 resulting from the intra-group transfer of certain IP rights, partially offset by other discrete income tax benefits of $11.7 million. During the three months ended September 30, 2024, Mattel recognized a net discrete tax benefit of $3.4 million primarily related to reassessments of prior years' tax liabilities, partially offset by the establishment of a valuation allowance on certain foreign deferred tax assets.
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. For the second quarter of 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. During the third quarter of 2024, there were no material 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 second 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 third quarter of 2024 and 2023:
Previous 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.
Current wording
Gross billings for the North America segment were $1.18 billion in the third quarter of 2024, a decrease of $36.6 million, or 3%, as compared to $1.22 billion in the third quarter of 2023. The decrease in the North America segment gross billings was 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.
Previous wording
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 wording
Sales adjustments increased to $76.0 million in the third quarter of 2024 from $73.9 million in the third quarter of 2023. Sales adjustments as a percentage of net sales was relatively consistent at 6.9% in the third quarter of 2024, as compared to 6.4% in the third quarter of 2023.
Previous wording
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 wording
Cost of sales decreased by $38.6 million, or 7%, to $534.8 million in the third quarter of 2024 from $573.4 million in the third quarter of 2023, primarily due to a decrease in product and other costs of $29.4 million and a decrease in freight and logistics expenses of $8.4 million.
Previous 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.
Current wording
North America segment operating income was $412.4 million in the third quarter of 2024, as compared to $401.1 million in the third quarter of 2023, primarily due to lower advertising and promotion expenses of $15.0 million, partially offset by higher other selling and administrative expenses of $3.6 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 second 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 third quarter of 2024 and 2023:
Previous 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.
Current wording
Gross billings for the International segment were $866.8 million in the third quarter of 2024, a decrease of $34.1 million, or 4%, as compared to $900.9 million in the third quarter of 2023, with an unfavorable 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 products, partially offset by higher billings of Vehicles products.
Previous wording
Infant, Toddler, and Preschool gross billings decreased 5%, of which 3% was due to lower billings of Baby Gear and Power Wheels products and 3% was due to lower billings of Preschool Entertainment products.
Current wording
Infant, Toddler, and Preschool gross billings decreased 7%, of which 3% was due to lower billings of Baby Gear and Power Wheels products and 3% was due to lower billings of Preschool Entertainment products.
Previous wording
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 wording
Action Figures, Building Sets, Games, and Other gross billings decreased 3%, of which 4% was due to lower billings of Other products, 3% was due to lower billings of Building Sets products, and 3% was due to lower billings of Action Figures products, partially offset by higher billings of Games products of 7%.
Previous 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.
Current wording
International segment operating income was $217.7 million in the third quarter of 2024, as compared to $202.5 million in the third quarter of 2023, due to higher gross profit of $7.6 million, lower advertising and promotion expenses of $4.3 million, and lower other selling and administrative expenses of $3.3 million.
Previous wording
The following table presents Mattel's consolidated results for the first half of 2024 and 2023:
Current wording
The following table presents Mattel's consolidated results for the first nine months 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 half 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 first nine months of 2024 and 2023:
Previous wording
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 wording
Infant, Toddler, and Preschool gross billings decreased 5%, of which 4% was due to lower billings of Baby Gear and Power Wheels products and 2% was due to lower billings of Preschool Entertainment products, partially offset by higher billings of Fisher-Price products of 2%.
Previous wording
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 wording
Action Figures, Building Sets, Games, and Other gross billings increased 1%, of which 7% was due to higher billings of Games products, partially offset by lower billings of Other products of 3% and lower billings of Building Sets products of 2%.
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 $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 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 $418.3 million in the first nine months of 2024 from $440.1 million in the first nine months of 2023. Sales adjustments as a percentage of net sales were relatively consistent at 11.2% in the first nine months of 2024, as compared to 11.5% in the first nine months of 2023.
Previous wording
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 wording
Cost of sales decreased by $192.5 million, or 9%, to $1.83 billion in the first nine months of 2024 from $2.03 billion in the first nine months of 2023. Within cost of sales, product and other costs decreased by $180.5 million, or 11%, to $1.44 billion in the first nine months of 2024 from $1.62 billion in the first nine months of 2023. Royalty expense decreased by $7.2 million, or 4%, to $167.7 million in the first nine months of 2024 from $175.0 million in the first nine months of 2023. Freight and logistics expenses decreased by $4.7 million, or 2%, to $225.5 million in the first nine months of 2024, as compared to $230.2 million in the first nine months 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 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 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 6.7% in the first nine months of 2024, as compared to 7.6% in the first nine months of 2023, primarily due to a shift in the expected timing of advertising and promotion programs to the fourth quarter of 2024.
Previous 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.
Current wording
Other selling and administrative expenses were $1.11 billion, or 29.8% of net sales, in the first nine months of 2024, an increase of $30.9 million, as compared to $1.08 billion, or 28.3% of net sales, in the first nine months of 2023. The increase in other selling and administrative expenses was primarily due to employee compensation increases and higher incentive compensation of $44.5 million, partially offset by realized savings from cost savings programs of $23.5 million and lower severance and restructuring charges of $19.2 million.
Previous wording
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.
Current wording
Interest expense was $89.4 million in the first nine months of 2024, relatively flat as compared to $92.5 million in the first nine months of 2023.
Previous 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.
Current wording
Interest income increased by $24.1 million to $39.5 million in the first nine months of 2024 from $15.4 million in the first nine months of 2023, primarily due to higher average invested cash balances in the first nine months of 2024.
Previous 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.
Current wording
Mattel's provision for income taxes was $94.8 million for the first nine months of 2024, as compared to $296.8 million for the first nine months of 2023. The decrease in provision for income taxes was due to discrete income tax expense in the first nine months of 2023, partially offset by the impact of higher income before income taxes in the first nine months of 2024, net of discrete income tax benefits. During the first nine months of 2023, Mattel recognized a net discrete income tax expense of $201.0 million, which included the establishment of a valuation allowance of $212.4 million on certain foreign deferred tax assets during the third quarter of 2023 resulting from the intra-group transfer of certain IP rights, partially offset by other discrete income tax benefits of $11.4 million. During the first nine months of 2024, Mattel recognized a net discrete tax benefit of $16.3 million primarily related to reassessments of prior years' tax liabilities and a discrete tax benefit on tax elections filed to amortize certain intangible assets transferred as part of Mattel's intra-group IP rights transfer.
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. For the first half of 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. During the third quarter of 2024, there were no material changes to Mattel's valuation allowance.
Previous wording
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 wording
Dolls gross billings decreased 9%, of which 8% was due to lower billings of Barbie, which benefited from the Barbie movie in the prior year, and 2% was due to lower billings of Disney Princess and Disney Frozen products.
Previous wording
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 wording
Infant, Toddler, and Preschool gross billings decreased 4%, of which 5% was due to lower billings of Baby Gear and Power Wheels products and 2% was due to lower billings of Preschool Entertainment products, partially offset by higher billings of Fisher-Price products of 3%.
Showing the first 40 of 62 pairs. Open the source sections for the rest.
Rearranged previous paragraphs (2)
Previous report — wording carried elsewhere
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 report — wording carried elsewhere
Infant, Toddler, and Preschool gross billings decreased 7%, of which 8% was due to lower billings of Baby Gear and Power Wheels products and 5% was due to lower billings of Preschool Entertainment products, partially offset by higher billings of Fisher-Price products of 6%.