Mattel (NASDAQ:MAT) reported mixed results for the first quarter, as a loss of $0.05 per share beat expectations by seven cents thanks to strong sales from Hot Wheels and Fisher-Price in North America.
Reported gross margin increased to 48.0% versus 40.0% of the same quarter last year and adjusted gross margin increased to 48.3% from 40.0%, attributed to lower inventory carrying costs, cost deflation, savings from the company’s profitable growth optimization program, favorable mix , foreign exchange and lower supply chain costs.
Global net sales fell 1%, with a 5% increase in vehicles more than offset by a 4% decline in doll sales and a 10% decline in the infant, toddler and preschool segment.
By brand, Hot Wheels global sales increased 5.7% in worldwide sales. Barbie sales increased just 0.3% while Fisher-Price sales remained stable compared to the same quarter last year.
In North America, by segment, dolls fell 1% and infant, toddler and preschool sales fell 8%, while vehicles and action figures/building sets/toys increased 6% and by 4%.
By brand, Hot Wheels sales in North America increased 6%, Barbie sales increased 3%, while Fisher-Price took the top spot with a 9% sales increase. Action figure/building set/game sales fell 4%.
For 2024, Mattel (MAT) expects adjusted earnings to be between $1.35 and $1.45 per share, straddling the Street consensus of $1.39. The adjusted EBITDA target is between $975 and $1.03 billion, with adjusted gross margin at 48.5%-49% versus 2023 gross margin of 47.5%. The company is targeting free cash flow of about $500 million, down from $709 million in 2023.
Mattel (MAT) stock is up 3% in after-hours trading.