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Mattel Reports First Quarter 2022 Financial Results

Mattel Logo First Quarter 2022

Mattel has announced their first quarter financial figures for 2022. First Quarter 2022 Highlights Versus Prior Year are included below:

  • Net Sales of $1,041 million, up 19% as reported, and 22% in constant currency
  • Reported Gross Margin of 46.4%, a decrease of 70 basis points; Adjusted Gross Margin of 46.6%, a decrease of 70 basis points
  • Reported Operating Income of $80 million, up 136%, an increase of $46 million; Adjusted Operating Income of $90 million, up 190%, an increase of $59 million
  • Reported Net Income of $21 million, an improvement of $134 million
  • Reported EPS of $0.06, an improvement of $0.38 per share; Adjusted EPS of $0.08, an improvement of $0.18 per share
  • Adjusted EBITDA of $152 million, up 65%, an increase of $60 million
  • Company reiterates 2022 guidance and 2023 goals

 

Ynon Kreiz, Chairman and CEO of Mattel, said: “Mattel achieved its highest first quarter results we have on record for net sales, operating income, and EBITDA. Our strong performance continued, with growth across regions, categories, and our three power brands. These results are in line with our strategy to grow Mattel’s IP-driven toy business. Having completed our turnaround in 2021, we are firmly in growth mode and operating as an IP-driven, high-performing toy company.”

 

Mr. Kreiz continued: “Mattel’s supply chain is playing a key role in our success. All of our factories are fully operational, and we are working with our retail partners to ensure product is available on shelves to meet consumer demand. The full-year outlook is strong, we expect to grow market share, and we are reiterating our 2022 guidance and 2023 goals.”

 

Anthony DiSilvestro, CFO of Mattel, said: “Mattel executed another outstanding quarter, and we are very pleased with the start of the year. Our topline performance benefited from increased points of distribution, as well as retailers restocking low inventories following the strong holiday season and gearing up to support product launches tied to the upcoming theatrical releases. Looking ahead, we continue to expect to grow net sales in 2022 by 8-10% in constant currency, driven by growth in our leader categories, led by our power brands and American Girl, as well as our Challenger categories. We expect to achieve strong growth in the second quarter, and to continue to improve free cash flow, conversion rate, and leverage ratio for the full year.”

 

Financial Overview: Mattel First Quarter 2022

For the first quarter, Net Sales were up 19% as reported, and 22% in constant currency, versus the prior year’s first quarter. Reported Operating Income was $80 million, an increase of $46 million, and Adjusted Operating Income was $90 million, an increase of $59 million. Reported Earnings Per Share were $0.06, an improvement of $0.38 per share, and Adjusted Earnings Per Share were $0.08, an improvement of $0.18 per share.

 

Net Sales in the North America segment increased 26% as reported and in constant currency, versus the prior year’s first quarter.

 

Gross Billings in the North America segment increased 25% as reported and in constant currency, driven by growth in Action Figures, Building Sets, Games, and Other (including Jurassic World™, Lightyear, and MEGA®), Vehicles (including Hot Wheels®), Infant, Toddler, and Preschool (including Fisher-Price® and Thomas & Friends™), and Dolls (including Barbie® and Polly Pocket®).

 

Net Sales in the International segment increased 16% as reported, and 24% in constant currency.

 

Gross Billings in the International segment increased 16% as reported, and 24% in constant currency, driven by growth in Vehicles (including Hot Wheels), Dolls (including Barbie and Polly Pocket), and Action Figures, Building Sets, Games, and Other (including Jurassic World, MEGA, and Lightyear).

 

Net Sales in the American Girl segment decreased 22% as reported and in constant currency.

 

Gross Billings in the American Girl segment decreased 22% as reported and in constant currency, compared to a very strong prior year.

 

Reported Gross Margin decreased to 46.4%, versus 47.1% in the prior year’s first quarter. Adjusted Gross Margin decreased to 46.6%, versus 47.3% in the prior year’s first quarter. The decrease in Reported and Adjusted Gross Margin was primarily due to input cost inflation, partially offset by favorable foreign exchange, pricing, favorable fixed cost absorption, and savings from the Optimizing for Growth program.

 

Reported Other Selling and Administrative Expenses increased by $25 million versus the prior year to $329 million. Adjusted Other Selling and Administrative Expenses increased by $13 million to $322 million. The increase in Adjusted Other Selling and Administrative Expenses was primarily due to higher employee-related expenses, partially offset by savings from the Optimizing for Growth program.

 

For the three months ended March 31, 2022, Cash Flows Used for Operating Activities were $144 million, an increase of $108 million, versus the prior year’s first quarter, primarily due to higher working capital usage, partially offset by higher net income, excluding the impact of non-cash charges. Cash Flows Used for Investing Activities were $55 million, an increase of $56 million, primarily due to the impact of prior year proceeds from the disposal of assets and a business and higher net payments of foreign currency forward contracts. Cash Flows Provided by Financing Activities and Other were $4 million, as compared to a use of $112 million in the prior year’s first quarter, with the change primarily due to the cash used for repayment and refinancing of long-term borrowings in the first quarter of 2021.

 

Gross Billings by Categories: Mattel First Quarter 2022

 

Worldwide Gross Billings for Dolls were $396 million, up 4% as reported, and 8% in constant currency, versus the prior year’s first quarter, primarily driven by growth in Barbie and Polly Pocket, partially offset by declines in American Girl.

 

Worldwide Gross Billings for Infant, Toddler, and Preschool were $206 million, up 12% as reported, and 15% in constant currency, primarily driven by growth in Fisher-Price and Thomas & Friends.

 

Worldwide Gross Billings for Vehicles were $282 million, up 31% as reported, and 36% in constant currency, primarily driven by growth in Hot Wheels.

 

Worldwide Gross Billings for Action Figures, Building Sets, Games, and Other were $281 million, up 41% as reported, and 44% in constant currency, primarily driven by growth in Action Figures (including Jurassic World and Lightyear) and Building Sets (including MEGA).