Mattel says sales fell but were in line with expectations and an upturn is predicted for the second half of the year that should temper this performance.
Mattel has reported second quarter 2023 financial results. Ynon Kreiz, chairman and CEO of the company, said: “Mattel’s second quarter financial results were in-line with our expectations. We significantly increased free cash flow and continued to gain market share. Importantly, this moment will be remembered as a key milestone in our company’s history with the release of the Barbie movie, our first ever major theatrical film.”
Ynon added: “The Barbie movie is a showcase for the cultural resonance of our IP, our ability to attract and collaborate with top creative talent and the capabilities of our franchise management organization. This also speaks to the potential of Mattel Films and the significant progress of our strategy to capture the full value of our IP.”
The report stated that second quarter financial results were negatively impacted as retailers continued to manage inventory levels and by some overall industry softness. Mattel said it was looking ahead to the second half of the year and all-important holiday season, and was reiterating its guidance.
For the second quarter, Net Sales were down 12% as reported, or 13% in constant currency, versus the prior year’s second quarter. Reported Operating Income was $63m, a decrease of $62m, and Adjusted Operating Income was $75m, a decrease of $47m .
For the first six months of the year, Net Sales declined 16% as reported, and 17% in constant currency, versus the prior year’s first six months. Reported Operating Loss was $52m, a decline of $257m, and Adjusted Operating Loss was $12m, a decrease of $224m.
Net Sales in the North America segment decreased 18% as reported and in constant currency, versus the prior year’s second quarter. In the International segment, they decreased 3% as reported, or 5% in constant currency.
Worldwide, Dolls was up +10% versus the prior year, primarily driven by Disney Princess and Disney Frozen, and Monster High, partially offset by a decline in Barbie; Infant, Toddler, and Pre-school was down -28%, primarily due to declines in Fisher-Price; Vehicles was up +11%, primarily driven by growth in Hot Wheels, and Action Figures, Building Sets, Games, and Other was down 39%, primarily due to declines in Action Figures (although Mattel highlighted that this was due to a stronger Action Figures slate related to 2022 theatrical releases the previous year) and Other.
Mattel said its full year 2023 guidance remains.