‘Mattel to Outpace Industry Growth and Gain Market Share in 2024’
‘Mattel to Outpace Industry Growth and Gain Market Share in 2024’
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Mattel Inc., the American multinational toy manufacturing and entertainment company, is anticipating strong improvement and growing consumer demand in the coming year. The iconic brand Barbie celebrated its 65th anniversary and continued to grow significantly both in the doll category and across the overall industry.

During a recent earnings call, Mattel Inc. disclosed its financial results for the first quarter, reporting a net loss of $28 million, a significant improvement from the previous year's loss, along with an enhanced gross margin. However, net sales slightly declined by 1% to $810 million compared to the previous year, falling short of the estimated $831.80 million. The loss per share was $0.08, better than the estimated loss per share of $0.13.

Ynon Kreiz, Executive Chairman and CEO of Mattel, said, “We are off to a good start to the year with significant gross margin expansion, positive Adjusted EBITDA, and very strong improvement in free cash flow. Trends in consumer demand for our product improved through the quarter, and we expect to outpace the industry and gain market share in 2024. We are executing our strategy to grow our IP-driven toy business and expand our entertainment offering.”

Anthony DiSilvestro, CFO of Mattel, added, “We achieved strong bottom-line results, primarily driven by margin expansion, repurchased $100 million of shares in the quarter, and are on track to meet our full-year guidance. We expect to continue benefiting from the Optimizing for Profitable Growth program, which is targeting $60 million in cost savings in 2024 and a total of $200 million in cost savings by 2026.”

Barbie’s Growing Demand

Talking about the expectations for Barbie in 2024, Kreiz said, “Barbie is an incredible brand. It's never been more relevant or connected to pop culture than it is today. The movie definitely broadened the aperture and brought in more demographics and a broader audience, creating more opportunities. Barbie continued to gain significant share in the Doll category and overall in the industry.”

He further added, “We are celebrating the 65th anniversary of Barbie. We have multiple activations and are launching three new segments that we talked about on Investor Day. We expect more shelf space in the second half. We are expanding into the adult collector line, targeting pop culture fans and continuing to cater to the core kids' demographics with more content on Netflix, including both series and movies.”

Elaborating further, Kreiz said, “There's also the new mobile game that we are publishing, or Take-Two is publishing as part of a relationship with us. So there's a lot going on around Barbie. We did say that Barbie will be marginally down for the year, given the incredible performance last year, but with the strength of the brand, all the various activations, and all the new lines we're launching, we expect it will continue to grow and go from strength to strength beyond '24.”

He added, “We've always said this is not about managing the brand quarter-by-quarter or even year-by-year. It's about long-term growth and expansion, and we couldn't be more confident and proud of where Barbie is today and where it's going from here.”

UNO’s Success and Gaming IPs

Mattel163, a joint venture between toy manufacturing giant Mattel and the Chinese internet technology company NetEase, focuses on developing and publishing mobile games and interactive digital experiences based on Mattel's iconic brands and properties. UNO is one of the successful mobile version games for the brand.

Elaborating on the initiatives of Mattel163, Kreiz said, “Much like the Barbie movie was a showcase for the potential in films, Mattel163 is a showcase for the potential of our brands to extend into digital games. We shared that in 2023, we reached almost $200 million at a very high margin with just three games, and that clearly speaks to the potential of our brands when executed well.”

He further said, “Our partners did a very good job in collaborating with us in marketing and creating games that create high engagement. We haven't announced any new games, but this remains a priority, and the new game with Take-Two will be another important partnership.”

Elaborating further, Kreiz said, “In addition, we are looking to do more self-publishing of mobile games based on our IP, where we have a higher level of participation economically in the success of our games based on strong brands. This emphasizes the importance of big brands to drive consumer engagement, reduce marketing costs, and potentially create a highly accretive business driven by strong brands.”

Retailer Sentiments

When asked during the earnings call about retailer sentiments and trends in the market, Kreiz said, “So far, things are in line with expectations. Retailers are leaning in. We always talk about the strategic value that retailers are placing on this category because it's experiential, drives foot traffic, and the items are affordable. This plays into a fundamental human behavior of trade that is not going away, especially when it comes to big brands and quality products.”

He further said, “What we've seen so far, as mentioned in the prepared remarks, is that we believe the industry benefited in the first quarter from an earlier Easter. Year-to-date to mid-April has been comparable to last year, but we do expect some decline in 2024, although at a lesser rate than last year.”

Elaborating further, Kreiz said, “The decline is due to the same factors that impacted 2023 in terms of a lighter toyetic theatrical film slate and the impact of a shift in consumer spending towards experiences and services. However, that trend is moderating. We believe it will further improve, and the industry will return to growth and continue to grow over the long term.”

He concluded, “We expect to outperform the industry. We did see positive consumer demand with the improving trends that we talked about. We expect to outperform the industry and gain market share for the full year.”

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