Mattel Reports Mixed Net Sales, Significant Profitability Improvements in Q3 2024

Mattel, Inc. reported its financial results for the third quarter and the first nine months of 2024, highlighting a mixed performance in net sales and significant improvements in profitability metrics compared to the previous fiscal period.

For the three months ended September 30, 2024, Mattel's net sales totaled $1,843.9 million, a decrease of 4% from $1,918.8 million in the same period of 2023. The decline was attributed to lower sales in the Dolls and Infant, Toddler, and Preschool categories, which were partially offset by increases in Vehicles and Action Figures. Notably, gross profit for the quarter was $979.0 million, maintaining a gross margin of 53.1%, up from 51.0% in Q3 2023, driven by supply chain efficiencies and cost deflation.

Operating income for the third quarter increased to $488.3 million, a 3% rise from $473.9 million in the prior year, while income before income taxes rose to $471.7 million, reflecting a 5% increase. Net income surged to $372.4 million, a significant increase of 154% compared to $146.3 million in Q3 2023. This resulted in earnings per share (EPS) of $1.10, up from $0.41 in the same quarter last year.

For the nine months ended September 30, 2024, total net sales were $3,733.1 million, down 2% from $3,820.5 million in the same period of 2023. However, net income for the nine months saw a remarkable increase of 498%, reaching $401.0 million compared to $67.0 million in the previous year. This was supported by a gross profit of $1.90 billion, a 6% increase from $1.79 billion in the first nine months of 2023.

Strategically, Mattel has been focusing on cost-saving initiatives through its "Optimizing for Profitable Growth" program, which aims for $200 million in annual gross cost savings by 2026. The program has already realized cumulative cost savings of approximately $60 million. Additionally, in July 2024, Mattel acquired a new office building in El Segundo, California, for approximately $59 million, which will enhance its global design and development capabilities.

As of September 30, 2024, Mattel's cash and equivalents stood at $723.5 million, an increase from $455.7 million a year earlier, although down from $1.26 billion at the end of 2023. The company also entered into a new $1.40 billion revolving credit facility in July 2024, with no outstanding borrowings as of the reporting date.

Overall, while Mattel faced challenges in net sales, its profitability metrics improved significantly, reflecting effective cost management and operational efficiencies.