Mattel Reports Q1 2024 Results: Adjusted Loss Narrows, Gross Margin Expands

Mattel, the toy manufacturer, reported its first quarter 2024 financial results on Monday. The company posted an adjusted loss per share of $0.05, beating analyst estimates of a $0.12 loss. Revenue came in at $810 million, slightly down from $814.6 million in the same period last year, but surpassing the consensus estimate of $809.5 million.

Despite the slight decline in revenue, Mattel's gross margin expanded significantly by 830 basis points to 48.3% in the quarter. This improvement was driven by lower inventory management costs, cost savings initiatives, favorable product mix, and foreign exchange benefits. The company's operating loss also narrowed to $36 million, an $80 million improvement compared to the prior year.

Why this matters: Mattel's better-than-expected results and expanding margins indicate the company's ongoing efforts to streamline operations and cut costs are paying off. The toy industry has faced challenges in recent years, but Mattel's performance suggests it is well-positioned to navigate the competitive landscape and drive future growth.

Mattel's CEO Ynon Kreiz expressed optimism about the company's prospects, stating, "Trends in consumer demand for our product improved through the quarter and we anticipate outpacing the industry and gaining market share in 2024." The company reaffirmed its full-year 2024 guidance, projecting adjusted gross margin in the range of 48.5% to 49% and adjusted earnings per share between $1.35 and $1.45.

During the quarter, Mattel repurchased $100 million of its shares, demonstrating confidence in its financial position and commitment to enhancing shareholder value. The company also highlighted the strong performance of its Vehicles segment, particularly the Hot Wheels brand, which saw international growth.

Looking ahead, Mattel plans to continue leveraging its iconic brand portfolio and expanding its entertainment offerings to drive growth. The company expects its cost-cutting efforts to yield $60 million in savings this year and $200 million by 2026. With improving consumer demand trends and a focus on operational efficiency, Mattel is well-positioned to outpace the industry and gain market share in the coming year.

Key Takeaways

• Mattel reported Q1 2024 results: adjusted loss of $0.05/share, beating estimates.
• Revenue declined slightly to $810M, but gross margin expanded significantly to 48.3%.
• Mattel's cost-cutting initiatives and favorable product mix drove margin improvement.
• CEO expressed optimism, reaffirmed full-year guidance, and announced $100M share buyback.
• Mattel plans to leverage brands, expand entertainment offerings, and cut costs to gain market share.