Mattel reported its third-quarter 2024 financial results on October 23, 2024, with net sales declining 4% as reported and 3% in constant currency to $1.84 billion. This decline was primarily attributed to a challenging comparison with the prior year, which benefited from the success of the Barbie movie.
Despite the sales decrease, Mattel's profitability showed strength, with adjusted gross margin increasing 210 basis points to 53.1%. Adjusted earnings per share grew 6% to $1.14, surpassing analyst expectations, driven by supply chain efficiencies and cost savings from the Optimizing for Profitable Growth program.
For the full year 2024, Mattel updated its net sales guidance to be comparable to slightly down in constant currency, trimming its previous forecast due to muted demand for toys ahead of the holiday season. However, the company reiterated its full-year adjusted EBITDA guidance of $975 million to $1.025 billion and adjusted EPS guidance of $1.35 to $1.45, signaling confidence in its ability to manage profitability through strong gross margin performance.
Category performance in Q3 saw Dolls gross billings down 14% due to the Barbie movie comparison, while Vehicles, led by Hot Wheels, achieved strong growth of 13%. Infant, Toddler, and Preschool declined 3%, partly offset by 2% growth in Fisher-Price. Challenger categories collectively grew 3%, with UNO achieving its largest quarter on record.
Mattel's trailing twelve-month free cash flow improved nearly 50% to $688 million, and the company repurchased $268 million of shares through the first nine months of the year. Retail inventory levels ended the quarter down high single digits compared to the prior year, positioning the company for the holiday season.
The content on BeyondSPX is for informational purposes only and should not be construed as financial or investment advice. We are not financial advisors. Consult with a qualified professional before making any investment decisions. Any actions you take based on information from this site are solely at your own risk.