Q2 2024 Mattel Inc Earnings Call Transcript
Key Points
- Significant gross margin expansion, with adjusted gross margin increasing by 430 basis points to 49.2%.
- Adjusted EBITDA improved by $23 million to $171 million, and adjusted EPS increased by $0.09 to $0.19.
- Free cash flow more than doubled in the trailing 12-month period, reaching $826 million compared to $361 million a year ago.
- Mattel Inc (MAT) repurchased $200 million of shares in the first half of 2024 and plans to continue share repurchases in the second half.
- The company gained market share globally in key categories such as dolls, vehicles, and infant, toddler, and preschool, with brands like Barbie, Hot Wheels, and Fisher-Price leading their respective categories.
- Net sales declined by 1% as reported, and gross billings declined by 2%, with low-single-digit declines in North America, EMEA, and LATAM.
- Dolls gross billings declined by 5%, primarily due to a wrap of early movie-related shipments from the prior year.
- Infant, toddler, and preschool categories saw a 3% decline due to strategic exits or out-licensing of certain segments.
- Adjusted SG&A expenses increased by $37 million to $361 million, driven by market-related pay increases, IT system upgrades, and hiring for the entertainment strategy.
- The toy industry is expected to decline modestly in 2024, although this is an improvement from earlier outlooks.
Good afternoon. My name is Brianna, and I will be your conference operator today. At this time, I would like to welcome everyone to Mattel's second-quarter 2024 earnings conference call. (Operator Instructions)
I will now turn the call over to David Zbojniewicz, Head of Investor Relations. You may begin your conference.
Thank you, operator. Good afternoon, everyone. Joining me today are Ynon Kreiz, Mattel's Chairman and Chief Executive Officer; and Anthony DiSilvestro, Mattel's Chief Financial Officer.
As you know, this afternoon, we reported Mattel's second-quarter 2024 financial results. We will begin today's call with Ynon and Anthony providing commentary on our results, after which we will provide some time for questions.
To help supplement our discussion today, we have provided you with a slide presentation. Our discussion, slide presentation, and earnings release may reference non-GAAP financial measures, including adjusted gross profit and adjusted gross margin
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