MATTEL INC /DE/
For the period ended Mar 31, 2025. Filed May 6, 2025.
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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.
Mar 31, 2025 · Filed May 6, 2025
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 2024-09-30; filed 2024-10-30.
0001628280-24-044151
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-03-31; filed 2025-05-06.
0001628280-25-022312
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 189 previous paragraphs and 122 current paragraphs.
56 unchanged; 40 reworded; 26 added; 88 removed; 5 previous and 0 current paragraphs rearranged.
Tables are not compared: 15 previous and 9 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 (26)
Current report
Mattel's net sales in the first quarter of 2025 increased 2% compared to the first quarter of 2024. Gross margin expanded to 49.4% in the first quarter of 2025 compared to 48.0% in the first quarter of 2024, with benefits from lower inventory management costs, the OPG program, and favorable foreign currency exchange, partially offset by cost inflation. Additionally, Mattel ended the first quarter with a cash balance of $1.24 billion, compared to $1.13 billion in the first quarter of 2024 after $460.0 million of share repurchases during the trailing twelve months.
Current report
The United States has recently announced changes to its global trade policy, including significant tariffs on imports from China, Vietnam, Mexico, Canada, and other countries. These actions, and retaliatory tariffs imposed by other countries on U.S. goods and exports, have led to significant volatility and uncertainty in global markets.
Current report
New or increased tariffs and other barriers to trade, especially in light of recent comments and executive orders made by the United States, could further impact or exacerbate these conditions. Historically, tariffs have led to increased trade and political tensions. Political tensions as a result of trade policies could reduce trade volume, investment, and other economic activities between major international economies, resulting in a material adverse effect on global economic conditions and on the stability of global financial markets. There is substantial uncertainty about the duration of existing tariffs, potential changes to existing tariffs, and whether additional tariffs may be imposed, modified, or suspended, and the impacts of such actions on Mattel's business. While the situation remains fluid, Mattel is continuing to evaluate these developments and taking actions designed to mitigate the anticipated cost impact on its business, such as further diversifying its supply chain, optimizing product sourcing and product mix, and taking pricing actions where necessary.
Current report
Results of Operations—First Quarter
Current report
Net sales in the first quarter of 2025 were $826.6 million, an increase of $17.1 million, or 2%, as compared to $809.5 million in the first quarter of 2024. The increase in net sales was primarily due to an increase in gross billings of $25.2 million, partially offset by an increase in sales adjustments of $8.1 million.
Current report
Gross billings were $924.2 million in the first quarter of 2025, an increase of $25.2 million, or 3%, as compared to $898.9 million in the first quarter of 2024, with an unfavorable impact from changes in currency exchange rates of two percentage points. The increase in gross billings was primarily due to higher billings of Action Figures, Building Sets, Games, and Other, Vehicles, and Dolls products, partially offset by lower billings of Infant, Toddler, and Preschool products.
Current report
Vehicles gross billings increased 4%, primarily due to higher billings of Hot Wheels products.
Current report
Action Figures, Building Sets, Games, and Other gross billings increased 12%, of which 19% was due to higher billings of Action Figures products, primarily due to higher billings of Minecraft and Jurassic World products in advance of their theatrical releases in 2025, partially offset by lower billings of Building Sets products of 8%.
Current report
Gross margin increased to 49.4% in the first quarter of 2025 from 48.0% in the first quarter of 2024. The increase in gross margin was primarily due to lower inventory management costs and other of 130 basis points, primarily lower inventory obsolescence and close-out sales, and incremental realized savings from the OPG program of 110 basis points, partially offset by cost inflation of 100 basis points.
Current report
Interest income was $16.0 million in the first quarter of 2025, relatively flat as compared to $17.3 million in the first quarter of 2024.
Current report
Benefit from Income Taxes
Current report
Net sales for the North America segment in the first quarter of 2025 were $491.4 million, an increase of $13.6 million, or 3%, as compared to $477.8 million in the first quarter of 2024. The increase in net sales was primarily due to an increase in gross billings of $19.6 million.
Current report
Dolls gross billings increased 5%, of which 2% was due to higher billings of Wicked products and 2% was due to higher billings of Disney Princess products, partially offset by lower billings of Trolls products of 2%.
Current report
Vehicles gross billings were flat year-over-year.
Current report
Action Figures, Building Sets, Games, and Other gross billings increased 12%, of which 22% was due to higher billings of Action Figures products, primarily due to higher billings of Jurassic World and Minecraft products in advance of their theatrical releases in 2025, partially offset by lower billings of Building Sets products of 8% and lower billings of Games products of 3%.
Current report
Sales adjustments increased to $34.6 million in the first quarter of 2025 from $28.6 million in the first quarter of 2024. Sales adjustments as a percentage of net sales increased to 7.0% in the first quarter of 2025, as compared to 6.0% in the first quarter of 2024. The increase in sales adjustments as a percentage of net sales was primarily due to higher promotional activities.
Current report
Cost of sales were relatively consistent at $256.3 million in the first quarter of 2025 as compared to $257.1 million in the first quarter of 2024.
Current report
Net sales for the International segment in the first quarter of 2025 were $335.3 million, an increase of $3.5 million, or 1%, as compared to $331.7 million in the first quarter of 2024. The increase in net sales was primarily due to an increase in gross billings of $5.7 million, partially offset by an increase in sales adjustments of $2.1 million.
Current report
Infant, Toddler, and Preschool gross billings decreased 15%, of which 14% was due to lower billings of Fisher-Price products.
Current report
Vehicles gross billings increased 8%, primarily due to higher billings of Hot Wheels products.
Current report
Action Figures, Building Sets, Games, and Other gross billings increased 13%, of which 14% was due to higher billings of Action Figures products, primarily due to higher billings of Minecraft products in advance of its theatrical release in 2025, and 9% was due to higher billings of Games products, partially offset by lower billings of Building Sets products of 9%.
Current report
Sales adjustments increased to $62.9 million in the first quarter of 2025 from $60.8 million in the first quarter of 2024. Sales adjustments as a percentage of net sales were relatively consistent at 18.8% in the first quarter of 2025, as compared to 18.3% in the first quarter of 2024.
Current report
Cost of sales decreased by $8.6 million, or 5%, to $175.5 million in the first quarter of 2025 from $184.1 million in the first quarter of 2024, primarily due to a decrease in product and other costs of $12.0 million.
Current report
Gross margin increased to 47.6% in the first quarter of 2025 from 44.5% in the first quarter of 2024. The increase in gross margin was primarily due to favorable foreign currency exchange of 300 basis points, incremental realized savings from the OPG program of 120 basis points, and lower inventory management costs of 110 basis points, including lower inventory obsolescence and close-out sales, partially offset by cost inflation of 140 basis points and unfavorable mix and other factors of 80 basis points.
Current report
Cash flows provided by operating activities were $24.8 million in the first three months of 2025, as compared to $35.5 million in the first three months of 2024. The decrease in cash flows provided by operating activities was primarily due to a decrease in net income, excluding the impact of non-cash items, partially offset by a decrease in cash used for working capital of $14.2 million. The decrease in cash used for working capital is primarily due to $45.5 million of favorable changes in accounts payable and accrued liabilities and $25.1 million of favorable changes in prepaid assets and other current assets, partially offset by $26.2 million of unfavorable changes in inventory and $20.0 million of unfavorable changes in accounts receivable, net.
Current report
Accounts receivable decreased $369.9 million to $633.3 million at March 31, 2025 from $1.00 billion at December 31, 2024, primarily due to seasonal declines as year-end receivables are collected. Accounts receivable decreased by $40.0 million to $633.3 million at March 31, 2025 from $673.3 million at March 31, 2024, primarily due to timing of sales and collections.
Removed paragraphs (88)
Previous report
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 report
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 report
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 report
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 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.
Previous report
Results of Operations—Third Quarter
Previous 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.
Previous report
(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.
Previous 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.
Previous 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.
Previous report
Infant, Toddler, and Preschool gross billings decreased 3%, due to lower billings of Baby Gear and Power Wheels products.
Previous report
Vehicles gross billings increased 12%, primarily due to higher billings of Hot Wheels products.
Previous report
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 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.
Previous report
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 report
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 report
Provision for Income Taxes
Previous report
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 report
The Organization for Economic Co-operation and Development ("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.
Previous report
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.
Previous 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.
Previous report
(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.
Previous report
Dolls gross billings decreased 14%, primarily due to lower billings of Barbie, which benefited from the Barbie movie in the prior year.
Previous report
Infant, Toddler, and Preschool gross billings decreased 1%, due to lower billings of Baby Gear and Power Wheels products.
Previous report
Vehicles gross billings increased 10%, primarily due to higher billings of Hot Wheels products.
Previous 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%.
Previous report
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 report
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 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.
Previous 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.
Previous report
(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.
Previous 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.
Previous report
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 report
Vehicles gross billings increased 14%, primarily due to higher billings of Hot Wheels products.
Previous report
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 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.
Previous 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.
Previous 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.
Previous report
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 report
Results of Operations—First Nine Months
Showing the first 40 of 88 passages. Open the source sections for the rest.
Reworded paragraphs (40)
Previous wording
Dolls—including brands such as Barbie, American Girl, Disney Princessand Disney Frozen, Monster High, and Polly Pocket. Mattel's Dolls portfolio is driven by the flagship Barbie brand and a collection of complementary brands offered globally. Empowering girls since 1959, Barbiehas inspired the limitless potential of every girl by showing them that they can be anything. American Girl, with an extensive portfolio of dolls and accessories, content, gaming, and lifestyle products, is best known for imparting valuable life lessons that instill confidence through its inspiring dolls and books, featuring diverse characters from past and present.
Current wording
Dolls—including brands such as Barbie, American Girl, Disney Princess, Disney Frozen, Monster High, and Polly Pocket. Mattel's Dolls portfolio is driven by the flagship Barbie brand and a collection of complementary brands offered globally. Empowering girls since 1959, Barbie has inspired the limitless potential of every girl by showing them that they can be anything. Monster High, a character-driven franchise, engages fans of all ages, encouraging them to be their authentic selves and celebrate what makes them unique. American Girl, with an extensive portfolio of dolls and accessories, content, gaming, and lifestyle products, is best known for imparting valuable life lessons that instill confidence through its inspiring dolls and books, featuring characters from past and present.
Previous wording
Infant, Toddler, and Preschool—including brands such as Fisher-Price(including Little People) and Thomas & Friends. As a leader in play and child development, Fisher-Price's mission is to help families by making the most fun, enriching products for infants, toddlers, and preschoolers. Thomas & Friendsis an award-winning preschool train brand franchise that brings meaningful life lessons of friendship and teamwork to kids through toys, content, live events, and other consumer products.
Current wording
Infant, Toddler, and Preschool—including brands such as Fisher-Price(including Little Peopleand Fisher-Price Wood), Imaginext, and Thomas & Friends. As a leader in play and child development, Fisher-Priceis dedicated to giving families the best possible start to life by making the most fun, enriching products for infants, toddlers, and preschoolers. Thomas & Friends is an award-winning preschool train brand franchise that lays the tracks to inspire, entertain, and develop young train fans through toys, content, live events, and other consumer products.
Previous wording
In the first quarter of 2024, Mattel further divided its Infant, Toddler, and Preschool category into three subcategories. The first subcategory is Fisher-Price, the power brand, which includes the core Infant, Little People, and Newborn product lines, as well as the recently launched Fisher-Price Wood product line. The second subcategory is Preschool Entertainment, which includes owned IP such as Thomas & Friends and Barney, Mattel's character based Imaginext line, and partner entertainment brands. The third subcategory is Baby Gear and Power Wheels, in which Mattel has decided to strategically out-license or exit certain product lines.
Current wording
Infant, Toddler, and Preschool is further divided into three subcategories. The first subcategory is Fisher-Price, the power brand, which includes the core Infant, Little People, and Newborn product lines, as well as the recently launched Fisher-Price Wood product line. The second subcategory is Preschool Entertainment, which includes owned IP such as Thomas & Friends and Barney, Mattel's character based Imaginext line, and partner entertainment brands. The third subcategory is Baby Gear and Power Wheels, in which Mattel is strategically out-licensing or exiting certain product lines.
Previous wording
Vehicles—including brands such as Hot Wheels (including Hot Wheels Monster Trucksand Hot Wheels Mario Kart (Nintendo)), Matchbox, and Cars (Disney Pixar). In production for over 50 years, Hot Wheels continues to push the limits of performance and design, and ignites and nurtures the challenger spirit of kids, adults, and collectors. From die-cast vehicles to tracks, playsets, and accessories, the Mattel Vehicles portfolio has broad appeal that engages and excites fans of all ages.
Current wording
Vehicles—including brands such as Hot Wheels(including Hot Wheels Monster Trucksand Hot Wheels RC), Matchbox, and Cars (Disney Pixar). In production for over 50 years, Hot Wheels continues to push the limits of performance and design, and ignites and nurtures the challenger spirit of kids, adults, and collectors. From die-cast vehicles to tracks, playsets, and accessories, the Mattel Vehicles portfolio has broad appeal that engages and excites fans of all ages.
Previous wording
Action Figures, Building Sets, Games, and Other—including brands such as Masters of the Universe, MEGA, UNO, Jurassic World(NBCUniversal), Minecraft (Microsoft), WWE, and Star Wars(Disney's Lucasfilm). Mattel's Action Figures portfolio is comprised of product lines associated with licensed entertainment franchises, such as Jurassic World and WWE, as well as product lines from Mattel-owned IP, such as Masters of the Universe. As the challenger brand in Building Sets, MEGA inspires creativity through authentic building experiences for builders of all ages and fans of global franchises. Within Games, UNOis the classic matching card game that is easy to learn and fast fun for everyone. Other includes Plush, which contains products associated with movie releases from licensed entertainment franchises, as well as Mattel-owned IP.
Current wording
Action Figures, Building Sets, Games, and Other—including brands such as Masters of the Universe, MEGA, UNO, Jurassic World (NBCUniversal), Minecraft (Microsoft), WWE, and Star Wars (Disney's Lucasfilm). Mattel's Action Figures portfolio is comprised of product lines associated with licensed entertainment franchises, such as Jurassic World and WWE, as well as product lines from Mattel-owned IP, such as Masters of the Universe. As the challenger brand in Building Sets, MEGA inspires creativity through authentic building experiences for builders of all ages and fans of global franchises. Within Games, UNO is the classic matching card game that is easy to learn and fast fun for everyone. Other includes Plush, which contains products associated with movie releases from licensed entertainment franchises, as well as Mattel-owned IP.
Previous wording
Mattel is operating in a macro-economic environment that may impact consumer demand. To the extent the macro-economic environment worsens, it may have a material effect on Mattel's results of operations and financial condition. Refer to Part I, Item 1A "Risk Factors" in the 2023 Annual Report on Form 10-K for further discussion regarding potential impacts on Mattel's business.
Current wording
Mattel is operating in an uncertain macro-economic environment with significant volatility that may impact consumer demand. To the extent the macro-economic environment worsens, it may have a material effect on Mattel's results of operations and financial condition. Refer to Part I, Item 1A "Risk Factors" in the 2024 Annual Report and Part II, Item 1A "Risk Factors" of this Quarterly Report on Form 10-Q for further discussion regarding potential impacts on Mattel's business.
Previous wording
The following table presents Mattel's consolidated results for the third quarter of 2024 and 2023:
Current wording
The following table presents Mattel's consolidated results for the first quarter of 2025 and 2024:
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 third 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 first quarter of 2025 and 2024:
Previous wording
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 wording
Dolls gross billings increased 1%, of which 2% was due to higher billings of Disney Princess products and 2% was due to higher billings of Wicked products, partially offset by lower billings of Trolls products of 2% and lower billings of Barbie products of 1%.
Previous wording
Infant, Toddler, and Preschool gross billings decreased 6%, 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 6%, of which 8% was due to lower billings of Baby Gear and Power Wheels products, due to the continued strategic exit from certain product lines in Baby Gear and Power Wheels.
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 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.
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 $97.5 million in the first quarter of 2025, from $89.4 million in the first quarter of 2024. Sales adjustments as a percentage of net sales increased to 11.8% in the first quarter of 2025, as compared to 11.0% in the first quarter of 2024. The increase in sales adjustments as a percentage of net sales was primarily due to higher promotional activities.
Previous 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.
Current wording
Cost of sales decreased by $2.1 million, or 1%, to $418.5 million in the first quarter of 2025 from $420.6 million in the first quarter of 2024. Within cost of sales, product and other costs decreased by $8.8 million, or 3%, to $310.3 million in the first quarter of 2025 from $319.1 million in the first quarter of 2024. Royalty expense increased by $6.4 million, or 18%, to $42.5 million in the first quarter of 2025 from $36.1 million in the first quarter of 2024. Freight and logistics expenses were relatively consistent at $65.7 million in the first quarter of 2025, as compared to $65.5 million in the first quarter of 2024.
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 6.7% 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.
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) general advertising costs, which include trade show costs. Advertising and promotion expenses as a percentage of net sales were relatively consistent at 8.5% in the first quarter of 2025, as compared to 8.8% in the first quarter of 2024.
Previous 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.
Current wording
Other selling and administrative expenses were $390.9 million, or 47.3% of net sales, in the first quarter of 2025, an increase of $37.9 million, as compared to $352.9 million, or 43.6% of net sales, in the first quarter of 2024. The increase in other selling and administrative expenses was primarily due to higher severance and restructuring charges of $15.1 million, higher expenses related to inclined sleeper product recall litigation of $10.4 million, higher employee compensation of $10.0 million, and higher outside services spend and other administrative expenses of $8.2 million, partially offset by realized savings from cost savings programs of $9.5 million.
Previous 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.
Current wording
Interest expense was $29.2 million in the first quarter of 2025, relatively flat as compared to $30.1 million in the first quarter of 2024.
Previous 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.
Current wording
Mattel's benefit from income taxes was $30.6 million in the first quarter of 2025, compared to $20.8 million in the first quarter of 2024. The increase in benefit from income taxes was driven by higher loss before income taxes and higher discrete income tax benefits in the first three months of 2025. During the three months ended March 31, 2025, Mattel recognized a net discrete tax benefit of $11.4 million, primarily related to a change of its indefinite reinvestment assertion relating to certain foreign subsidiary earnings. During the three months ended March 31, 2024, Mattel recognized a net discrete income 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 intellectual property rights transfer of $10.1 million, partially offset by interest related to unrecognized tax benefits.
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 third quarter of 2024, there were no material 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 first quarter of 2025, 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 third 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 first quarter of 2025 and 2024:
Previous 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.
Current wording
Gross billings for the North America segment were $526.0 million in the first quarter of 2025, an increase of $19.6 million, or 4%, as compared to $506.4 million in the first quarter of 2024. The increase in the North America segment gross billings was due to higher billings of Action Figures, Building Sets, Games, and Other, and Dolls products.
Previous 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%.
Current wording
Infant, Toddler, and Preschool gross billings were flat year-over-year, with lower billings of Baby Gear and Power Wheels products of 11%, substantially offset by higher billings of Preschool Entertainment products of 6% and higher billings of Fisher-Price products of 5%.
Previous wording
Gross margin increased to 48.9% in the first nine months of 2024 from 45.1% in the first nine months of 2023, primarily due to supply chain and other efficiencies of 300 basis points, incremental realized savings from the OPG program of 110 basis points, and cost deflation of 70 basis points, partially offset by unfavorable mix of 100 basis points.
Current wording
Gross margin increased to 47.8% in the first quarter of 2025 from 46.2% in the first quarter of 2024. The increase in gross margin was primarily due to lower inventory management costs of 120 basis points, including lower inventory obsolescence and close-out sales, and incremental realized savings from the OPG program of 110 basis points, partially offset by cost inflation of 70 basis points.
Previous 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.
Current wording
North America segment operating income was $83.1 million in the first quarter of 2025, as compared to $73.0 million in the first quarter of 2024, primarily due to higher gross profit of $14.4 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 third 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 first quarter of 2025 and 2024:
Previous 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.
Current wording
Gross billings for the International segment were $398.2 million in the first quarter of 2025, an increase of $5.7 million, or 1%, as compared to $392.5 million in the first quarter of 2024, with an unfavorable impact from changes in currency exchange rates of four percentage points. The increase in the International segment gross billings was due to higher billings of Vehicles and Action Figures, Building Sets, Games, and Other products, partially offset by lower billings of Infant, Toddler, and Preschool and Dolls products.
Previous 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%.
Current wording
Dolls gross billings decreased 4%, of which 3% was due to lower billings of Polly Pocket products and 3% was due to lower billings of Barbie products, partially offset by higher billings of Disney Princess products of 3%.
Previous wording
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 wording
International segment operating income was $23.3 million in the first quarter of 2025, as compared to $9.3 million in the first quarter of 2024, primarily due to higher gross profit of $12.1 million and lower advertising and promotion expenses of $5.1 million.
Previous 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 taken in 2023 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 taken in 2023 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 60% is expected to benefit cost of sales and 40% is expected to benefit other selling and administrative expenses. Total cash expenditures under the OPG program are expected to be between $115 and $140 million and total non-cash charges are expected to be up to $5 million.
Previous wording
As of September 30, 2024, Mattel has recorded cumulative severance and other restructuring charges related to the OPG program of approximately $73 million, which includes approximately $1 million of non-cash charges. Mattel realized cumulative cost savings (before severance, restructuring costs, and cost inflation) of approximately $60 million, which represents approximately 60% benefit to cost of sales, and 40% benefit to other selling and administrative expenses, as of September 30, 2024, in connection with the OPG Program.
Current wording
As of March 31, 2025, Mattel has recorded cumulative severance and other restructuring charges related to the OPG program of approximately $94 million, which includes approximately $2 million of non-cash charges. Mattel realized cumulative cost savings (before severance, restructuring costs, and cost inflation) of approximately $103 million, which represents approximately 60% benefit to cost of sales, and 40% benefit to other selling and administrative expenses, as of March 31, 2025, in connection with the OPG Program.
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 New Revolving Credit Facility, which on July 15, 2024 replaced the $1.40 billion 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 $723.5 million in cash and equivalents at September 30, 2024, $499.4 million was held by foreign subsidiaries, including $59.1 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 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 $1.24 billion in cash and equivalents at March 31, 2025, $931.2 million was held by foreign subsidiaries, including $68.6 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 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.
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, such as tariffs, 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 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 Credit Facility, and access to capital markets will be sufficient to meet working capital, operating expenditure, and other contractual 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 New Revolving Credit Facility to meet its short-term liquidity needs. At September 30, 2024, Mattel had no outstanding borrowings under the New Revolving Credit Facility and approximately $9 million in outstanding letters of credit under the New Revolving Credit Facility.
Current wording
Mattel intends to utilize its existing cash and cash equivalents, cash flow from operations, and borrowings under the Credit Facility to meet its short-term liquidity needs. At March 31, 2025, Mattel had no outstanding borrowings under the Credit Facility and approximately $9 million in outstanding letters of credit under the Credit Facility.
Previous wording
Cash flows used for investing activities were $151.7 million in the first nine months of 2024, as compared to $93.9 million in the first nine months of 2023. The change was primarily due to higher capital expenditures of $39.4 million, due to the purchase of an office building for approximately $59 million in July 2024, and lower proceeds from foreign currency forward exchange contracts of $18.4 million in the first nine months of 2024.
Current wording
Cash flows used for investing activities were $31.3 million in the first three months of 2025, as compared to $28.4 million in the first three months of 2024. The increase in cash flows used for investing activities was primarily due to higher capital expenditures of $5.7 million in the first three months of 2025.
Previous wording
Cash flows used for financing activities were $314.2 million in the first nine months of 2024, as compared to $119.5 million in the first nine months of 2023. The change was primarily due to $158.4 million of higher share repurchases in the first nine months of 2024 as compared to the first nine months of 2023.
Current wording
Cash flows used for financing activities were $161.9 million in the first three months of 2025, as compared to $131.3 million in the first three months of 2024. The increase in cash flows used for financing activities was primarily due to $60.0 million of higher share repurchases in the first three months of 2025 as compared to the first three months of 2024.
Previous wording
Mattel's cash and equivalents decreased $537.8 million to $723.5 million at September 30, 2024 from $1.26 billion at December 31, 2023, primarily due to share repurchases of $268.3 million, capital expenditures of $156.9 million, and cash flows used for operating activities of $61.6 million during the nine months ended September 30, 2024. Mattel's cash and equivalents increased $267.8 million to $723.5 million at September 30, 2024 from $455.7 million at September 30, 2023, primarily due to cash flows generated from operating activities of $887.8 million during the trailing twelve months, partially offset by $361.5 million of share repurchases and $199.7 million of capital expenditures during the trailing twelve months.
Current wording
Mattel's cash and equivalents decreased $144.2 million to $1.24 billion at March 31, 2025 from $1.39 billion at December 31, 2024, primarily due to share repurchases of $160.0 million and capital expenditures of $36.2 million, partially offset by cash flows provided by operating activities of $24.8 million during the three months ended March 31, 2025. Mattel's cash and equivalents increased $113.5 million to $1.24 billion at March 31, 2025 from $1.13 billion at March 31, 2024, primarily due to cash flows provided by operating activities of $789.9 million during the trailing twelve months, partially offset by $460.0 million of share repurchases and $208.3 million of capital expenditures during the trailing twelve months.
Previous wording
Inventories increased $165.6 million to $737.2 million at September 30, 2024 from $571.6 million at December 31, 2023, primarily due to seasonal inventory build. Inventories decreased $53.3 million to $737.2 million at September 30, 2024 from $790.5 million at September 30, 2023, primarily due to continued inventory management efforts.
Current wording
Inventories increased $156.7 million to $658.4 million at March 31, 2025 from $501.7 million at December 31, 2024, primarily due to seasonal inventory build. Inventories decreased $10.9 million to $658.4 million at March 31, 2025 from $669.3 million at March 31, 2024, primarily due to continued inventory management efforts.
Previous wording
Prepaid expenses and other current assets increased $34.8 million to $242.3 million at September 30, 2024 from $207.5 million at December 31, 2023, which included increases in prepaid royalties of $13.2 million, other current assets of $13.0 million and prepaid value added taxes of $11.2 million. Prepaid expenses and other current assets increased $17.5 million to $242.3 million at September 30, 2024 from $224.8 million at September 30, 2023, which included increases in prepaid royalties of $14.2 million and other current assets of $13.4 million, partially offset by a decrease in derivative receivables of $10.4 million.
Current wording
Prepaid expenses and other current assets increased $17.0 million to $251.1 million at March 31, 2025 from $234.1 million at December 31, 2024, primarily due to increases in prepaid insurance of $12.5 million and prepaid income taxes of $10.8 million, partially offset by a decrease in derivative receivables of $11.2 million. Prepaid expenses and other current assets decreased $11.6 million to $251.1 million at March 31, 2025 from $262.7 million at March 31, 2024, primarily due to decreases in prepaid income taxes of $22.3 million.
Previous wording
Accounts payable and accrued liabilities decreased $66.2 million to $1.24 billion at September 30, 2024 from $1.31 billion at December 31, 2023, due to seasonal declines in expenditure levels and the timing of incentive compensation payments. Accounts payable and accrued liabilities were $1.24 billion at September 30, 2024, relatively flat as compared to $1.25 billion at September 30, 2023.
Current wording
Accounts payable and accrued liabilities decreased $146.0 million to $1.13 billion at March 31, 2025 from $1.28 billion at December 31, 2024, due to seasonal declines in expenditure levels. Accounts payable and accrued liabilities increased $47.6 million to $1.13 billion at March 31, 2025 from $1.08 billion at March 31, 2024, primarily due to increases in accrued compensation of $24.2 million and accrued royalties of $20.2 million.
Previous wording
Total debt was $2.33 billion at each of September 30, 2024, December 31, 2023 and September 30, 2023, respectively.
Current wording
Total debt was $2.34 billion at March 31, 2025, and $2.33 billion at December 31, 2024 and March 31, 2024, respectively.
Previous wording
Stockholders' equity increased $163.7 million to $2.31 billion at September 30, 2024 from $2.15 billion at December 31, 2023, primarily due to net income of $401.0 million and the net effect of share-based compensation and the related issuance of treasury stock of $44.1 million, partially offset by share repurchases of $268.3 million during the first nine months of 2024. Stockholders' equity increased $277.5 million to $2.31 billion at September 30, 2024 from $2.04 billion at September 30, 2023, primarily due to net income of $548.3 million and the net effect of share-based compensation and the related issuance of treasury stock of $74.5 million during the trailing twelve months, partially offset by share repurchases of $361.5 million during the trailing twelve months.
Current wording
Stockholders' equity decreased $134.5 million to $2.13 billion at March 31, 2025 from $2.26 billion at December 31, 2024, primarily due to share repurchases of $160.0 million and net loss of $40.3 million, partially offset by other comprehensive income of $47.9 million and the impact of share-based compensation on additional paid-in capital of $19.9 million during the first three months of 2025. Stockholders' equity increased $104.3 million to $2.13 billion at March 31, 2025 from $2.03 billion at March 31, 2024, primarily due to net income of $529.8 million and the impact of share-based compensation on additional paid-in capital of $81.4 million during the trailing twelve months, partially offset by share repurchases of $464.2 million and other comprehensive loss of $30.9 million during the trailing twelve months.
Previous wording
Mattel's critical accounting policies and estimates are included in the 2023 Annual Report on Form 10-K and did not materially change during the first nine months of 2024.
Current wording
Mattel's critical accounting policies and estimates are included in the 2024 Annual Report on Form 10-K and did not materially change during the first three months of 2025.
Rearranged previous paragraphs (5)
Previous report — wording carried 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 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 report — wording carried elsewhere
The following table presents Mattel's consolidated results for the first nine months of 2024 and 2023:
Previous report — wording carried 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 nine months of 2024 and 2023:
Previous report — wording carried 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 $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 report — wording carried 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. During the third quarter of 2024, there were no material changes to Mattel's valuation allowance.