First quarter earnings season is underway with Mattel leading the charge as the first of the publicly traded toy companies to check in for 2024. While economic concerns and a lack of retail excitement have plagued the industry in recent months, Mattel’s overall net sales saw just a slight decline amid modest growth in North America.
We are off to a good start to the year … 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."
Mattel‘s earnings report reveals net sales of $810 million, down 1% as reported and in constant currency versus the same period last year. Despite this, gross margin increased to 48.0%, operating loss improved to $36 million, and net loss decreased to $28 million. Adjusted EBITDA surged to $54 million. Additionally, Mattel repurchased $100 million of shares and reaffirmed its 2024 guidance.
In North America, net sales increased 2%, driven by growth in Vehicles (primarily Hot Wheels) and Action Figures, Building Sets, Games, and Other (primarily Action Figures), partly offset by declines in Infant, Toddler, and Preschool (primarily Baby Gear) and Dolls (primarily Disney Princess and Disney Frozen).
On a global level, gross billings for Dolls dipped 4% while Infant, Toddler and Preschool slid 10% with Polly Pocket, Disney Princess, Disney Frozen, Baby Gear, and Preschool Entertainment responsible for the decline. Trolls and Monster high saw growth in Q1.
Additionally, Vehicles remain hot with a 5% gain in gross billings primarily driven by growth in Hot Wheels. Action Figures, Building Sets, Games, and Other were flat driven by growth in Games.
“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,” adds Mattel’s Chief Financial Offer Anthony DiSilvestro. “We expect to continue to benefit 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.”
Mattel executives will host an earnings call this evening at 5 p.m ET.
