Despite double-digit declines in Q1, Mattel remains confident that it will achieve its full year guidance and gain market share in 2023.

Mattel’s Q1 results were largely in line with expectations, as the US toy industry gets to grips with an underwhelming festive season that saw suppliers and retailers left with significant overstocks. For the first quarter, Net Sales were down -22% as reported, or +21% in constant currency, versus the prior year. Reported Operating Loss was $115m, a decrease of $195m.

Net Sales in the North America segment decreased -27% as reported and in constant currency. Net Sales in the International segment decreased -15% as reported, or -13% in constant currency, despite solid growth in the Vehicles category, which includes the Hot Wheels brand.

Commenting on the results, Ynon Kreiz, chairman and CEO of Mattel, said: “While retail inventory management impacted the first quarter’s results, the underlying business performed well. Mattel achieved growth and gained market share, per Circana. The fundamentals of our business are strong. We expect to outpace the industry, gain market share, and achieve our full year guidance. We are well positioned to continue executing our multi-year strategy and create long-term shareholder value.”

Anthony DiSilvestro, CFO of Mattel, added: “We expect consumer demand to be positive for the full year and for revenue comparisons to improve, as shipping patterns revert to historical trends in the second half. We continue to generate meaningful free cash flow and expect to exceed $400m in 2023. Consistent with our capital allocation priorities, we have resumed share repurchases, which also reflects confidence in our strategy.”