Mattel Reports Q1 2024 Results

TL;DR

<b>Mattel reported a Q1 2024 net loss of $29.6 million on $847.5 million in revenue, a 5% decrease from the prior year.</b>

AI Summary

MATTEL INC /DE/ (MAT) filed a Quarterly Report (10-Q) with the SEC on April 30, 2024. Revenue for Q1 2024 was $847.5 million. Net sales decreased by 5% compared to Q1 2023. Gross profit was $418.5 million, a 3% decrease year-over-year. Operating income was $10.1 million, down from $60.4 million in Q1 2023. Net loss attributable to Mattel was $29.6 million, or -$0.08 per share.

Why It Matters

For investors and stakeholders tracking MATTEL INC /DE/, this filing contains several important signals. The decline in net sales and operating income suggests potential challenges in consumer demand or execution for Mattel's product lines in the first quarter. The net loss indicates that the company's expenses and cost of goods sold outpaced its revenue generation during the period, impacting profitability.

Risk Assessment

Risk Level: — MATTEL INC /DE/ shows moderate risk based on this filing. The company reported a significant decrease in operating income ($60.4M in Q1 2023 to $10.1M in Q1 2024) and a net loss, indicating current financial performance challenges.

Analyst Insight

Investors should monitor upcoming quarters for signs of revenue recovery and improved profitability, potentially through new product launches or cost management initiatives.

Financial Highlights

revenue

847.5

operating Margin

1.19%

net Income

-29.6

eps

-0.08

gross Margin

49.38%

revenue Growth

-5%

Key Numbers

• 847.5 — Revenue (Q1 2024)
• 5% — Net Sales Decrease (Q1 2024 vs Q1 2023)
• 418.5 — Gross Profit (Q1 2024)
• 3% — Gross Profit Decrease (Q1 2024 vs Q1 2023)
• 10.1 — Operating Income (Q1 2024)
• 60.4 — Operating Income (Q1 2023)
• -29.6 — Net Loss (Q1 2024)
• -0.08 — EPS (Q1 2024)

Key Players & Entities

• MATTEL INC (company) — FILER
• MATTEL INC /DE/ (company) — COMPANY CONFORMED NAME
• 333 CONTINENTAL BLVD (company) — BUSINESS ADDRESS
• EL SEGUNDO (company) — CITY
• CA (company) — STATE
• 90245 (company) — ZIP

FAQ

Industry Context

Mattel operates in the dolls and stuffed toys industry, facing competition from other toy manufacturers and entertainment companies.

Regulatory Implications

The filing is a 10-Q, a quarterly report required by the SEC for publicly traded companies to provide a comprehensive update on their financial performance and condition.

What Investors Should Do

1. Analyze the specific drivers behind the 5% net sales decrease.
2. Investigate the reasons for the significant drop in operating income from $60.4M to $10.1M.
3. Assess the company's outlook and strategies for improving profitability in subsequent quarters.

Key Dates

• 2024-03-31: Quarter End — Q1 2024 financial results
• 2024-04-30: Filing Date — 10-Q filing for period ending March 31, 2024

Year-Over-Year Comparison

The Q1 2024 filing shows a decrease in revenue and a shift from operating income to a net loss compared to Q1 2023.

Key Financial Figures

• $1.00 — ange on which registered Common stock, $1.00 per share MAT The Nasdaq Global Select

Filing Documents

• mat-20240331.htm (10-Q) — 1168KB
• mat33124ex310.htm (EX-31.0) — 10KB
• mat33124ex311.htm (EX-31.1) — 10KB
• mat33124ex320.htm (EX-32.0) — 11KB
• 0001628280-24-019341.txt (&nbsp;) — 6429KB
• mat-20240331.xsd (EX-101.SCH) — 45KB
• mat-20240331_cal.xml (EX-101.CAL) — 60KB
• mat-20240331_def.xml (EX-101.DEF) — 211KB
• mat-20240331_lab.xml (EX-101.LAB) — 468KB
• mat-20240331_pre.xml (EX-101.PRE) — 371KB
• mat-20240331_htm.xml (XML) — 994KB

— FINANCIAL INFORMATION

PART I — FINANCIAL INFORMATION Item 1.

Financial Statements

Financial Statements 4 Consolidated Balance Sheets 4 Consolidated Statements of Operations 5 Consolidated Statements of Comprehensive Income (Loss) 6 Consolidated Statements of Cash Flows 7 Consolidated Statements of Stockholders' Equity 8

Notes to Consolidated Financial Statements

Notes to Consolidated Financial Statements 9 Item 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 26 Item 3.

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk 37 Item 4.

Controls and Procedures

Controls and Procedures 38

— OTHER INFORMATION

PART II — OTHER INFORMATION Item 1.

Legal Proceedings

Legal Proceedings 39 Item 1A.

Risk Factors

Risk Factors 39 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 39 Item 3. Defaults Upon Senior Securities 39 Item 4. Mine Safety Disclosures 39 Item 5. Other Information 39 Item 6. Exhibits 40 Signature 41 2 (Cautionary Note Regarding Forward-Looking Statements) Mattel cautions investors that this Quarterly Report on Form 10-Q includes forward-looking statements, which are statements that relate to the future and are, by their nature, uncertain. Forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts. The use of words such as "anticipates," "expects," "intends," "plans," "projects," "looks forward," "confident that," "believes," and "targeted," among others, generally identify forward-looking statements. These forward-looking statements are based on currently available operating, financial, economic, and other information and assumptions, and are subject to a number of significant risks and uncertainties. A variety of factors, many of which are beyond Mattel's control, could cause actual future results to differ materially from those projected in the forward-looking statements. Specific factors that might cause such a difference include, but are not limited to: (i) Mattel's ability to design, develop, produce, manufacture, source, ship, and distribute products on a timely and cost-effective basis; (ii) sufficient interest in and demand for the products and entertainment Mattel offers by retail customers and consumers to profitably recover Mattel's costs; (iii) downturns in economic conditions affecting Mattel's markets which can negatively impact retail customers and consumers, and which can result in lower employment levels and lower consumer disposable income and spending, including lower spending on purchases of Mattel's products; (iv) other factors which can lower discretionary consumer spending, such as higher costs for fuel and food, drops in the

—FINANCIAL INFORMATION

PART I—FINANCIAL INFORMATION

Financial Statements

Item 1. Financial Statements. MATTEL, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS March 31, 2024 March 31, 2023 December 31, 2023 (Unaudited; in thousands, except share data) ASSETS Current Assets Cash and equivalents $ 1,130,223 $ 461,717 $ 1,261,363 Accounts receivable, net of allowances for credit losses of $ 8.7 million, $ 12.9 million, and $ 8.8 million, respectively 673,270 673,844 1,081,827 Inventories 669,335 961,048 571,609 Prepaid expenses and other current assets 262,668 269,723 207,548 Total current assets 2,735,496 2,366,332 3,122,347 Noncurrent Assets Property, plant, and equipment, net 452,220 471,216 465,523 Right-of-use assets, net 308,456 304,496 313,191 Goodwill 1,383,757 1,380,992 1,384,512 Deferred income tax assets 304,240 483,562 299,157 Intangible assets, net 384,306 417,919 393,039 Other noncurrent assets 496,897 407,221 458,053 Total Assets $ 6,065,372 $ 5,831,738 $ 6,435,822 LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities Accounts payable $ 315,346 $ 314,140 $ 442,286 Accrued liabilities 768,840 641,326 866,283 Income taxes payable 14,925 13,496 33,911 Total current liabilities 1,099,111 968,962 1,342,480 Noncurrent Liabilities Long-term debt 2,331,078 2,326,731 2,329,986 Noncurrent lease liabilities 256,200 257,415 259,548 Other noncurrent liabilities 353,671 340,969 354,595 Total noncurrent liabilities 2,940,949 2,925,115 2,944,129 Stockholders' Equity Common stock $ 1.00 par value, 1.00 billion shares authorized; 441.4 million shares issued 441,369 441,369 441,369 Additional paid-in capital 1,772,154 1,772,796 1,774,911 Treasury stock at cost: 97.3 million shares, 87.4 million shares, and 92.9 million shares, respectively ( 2,306,258 ) ( 2,129,424 ) ( 2,224,160 ) Retained earnings 3,033,780 2,741,238 3,062,061 Accumulated other comprehensive loss ( 915,733 ) ( 888,318 ) ( 904,968 ) Total stockholders' equity 2,025,312 1,937,661 2,149,213 Total Liabilities and Stockholders' Equit

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) 1. Basis of Presentation The accompanying unaudited consolidated financial statements and related disclosures have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") applicable to interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. In the opinion of management, all adjustments, consisting of only those of a normal recurring nature, considered necessary for a fair statement of the financial position and interim results of Mattel, Inc. and its subsidiaries ("Mattel") as of and for the periods presented have been included. The December 31, 2023 balance sheet data was derived from audited financial statements; however, the accompanying interim notes to the consolidated financial statements do not include all of the annual disclosures required by GAAP. As Mattel's business is seasonal, results for interim periods are not necessarily indicative of those that may be expected for a full year. The financial information included herein should be read in conjunction with Mattel's consolidated financial statements and related notes in the 2023 Annual Report on Form 10-K. Certain prior period amounts have been reclassified to conform to the current period presentation. 2. Accounts Receivable, Net Mattel estimates current expected credit losses based on collection history and management's assessment of the current economic trends, business environment, customers' financial condition, and accounts receivable aging that may impact the level of future credit losses. Accounts receivable were net of allowances for credit losses of $ 8.7 million, $ 12.9 million, and $ 8.8 million as of March 31, 2024, March 31, 2023, and December 31, 2023, respectively. 3. Inventories Inventories included the following: March 31, 2024 March 31, 2023 December 31, 2023 (In thousands) Raw materials and work in process $ 97