On July 23, 2024, Mattel Inc (MAT, Financial) released its 8-K filing detailing the financial results for the second quarter of 2024. The company, known for its iconic toy brands such as Barbie, Hot Wheels, Fisher-Price, and American Girl, reported earnings per share (EPS) of $0.17, surpassing the analyst estimate of $0.15. However, the company’s revenue of $1,080 million fell slightly short of the estimated $1,097.48 million.
Company Overview
Mattel Inc (MAT, Financial) markets toy products to wholesale customers and directly to retail consumers. The company offers a wide range of products for children and families, including toys for infants and preschoolers, youth electronics, games, puzzles, educational toys, and fashion-related toys. Mattel's portfolio includes well-known brands such as Barbie, Hot Wheels, Fisher-Price, Thomas & Friends, and American Girl. The company generates over 50% of its net sales from North America, with the remainder coming from international markets.
Performance and Challenges
For the second quarter of 2024, Mattel Inc (MAT, Financial) reported net sales of $1,080 million, a 1% decrease compared to the same period last year. Despite the slight decline in revenue, the company achieved significant improvements in profitability metrics. Gross margin increased by 410 basis points to 49.2%, and operating income rose by $20 million to $83 million. Net income also saw a substantial improvement, reaching $57 million, up by $30 million from the previous year.
However, the company faced challenges in its North America segment, where net sales decreased by 3%. This decline was primarily due to lower sales in categories such as Infant, Toddler, and Preschool, Dolls, and Vehicles. Despite these challenges, the company saw growth in its International segment, with net sales increasing by 2% as reported and 3% in constant currency.
Financial Achievements
Mattel Inc (MAT, Financial) achieved several notable financial milestones in the second quarter of 2024. The company’s adjusted earnings per share (EPS) increased to $0.19, compared to $0.10 in the same period last year. Adjusted EBITDA also improved by $23 million, reaching $171 million. Additionally, Mattel repurchased $100 million worth of shares, bringing the total share repurchases for the first half of the year to $200 million.
Ynon Kreiz, Chairman and CEO of Mattel, stated, “This was a good quarter for Mattel, where we achieved significant gross margin expansion, and growth in Adjusted EBITDA and Adjusted EPS. We further strengthened our balance sheet and more than doubled free cash flow in the trailing twelve-month period.”
Income Statement Highlights
| Metric | Q2 2024 | Q2 2023 |
|---|---|---|
| Net Sales | $1,080 million | $1,090 million |
| Gross Margin | 49.2% | 45.1% |
| Operating Income | $83 million | $63 million |
| Net Income | $57 million | $27 million |
| Earnings Per Share | $0.17 | $0.08 |
Analysis and Outlook
Mattel Inc (MAT, Financial) demonstrated resilience in the face of a challenging market environment, achieving higher profitability despite a slight decline in revenue. The company’s focus on cost management and operational efficiency contributed to the significant improvement in gross margin and operating income. The increase in adjusted EPS and EBITDA further underscores the company’s strong financial performance.
Looking ahead, Mattel remains optimistic about its growth prospects, driven by new product innovations and increased retail support. The company reiterated its full-year 2024 guidance, expecting to achieve net sales comparable to the previous year in constant currency, with adjusted EPS projected to be between $1.35 and $1.45.
Anthony DiSilvestro, CFO of Mattel, commented, “We continue to generate significant cash flow and are executing our capital allocation priorities, with the expectation to continue share repurchases in the second half of the year. We expect to achieve our 2024 guidance and grow both sales and earnings in 2025.”
For more detailed information, please refer to the full 8-K filing.
Explore the complete 8-K earnings release (here) from Mattel Inc for further details.
