Mattel, Inc.:  Initiation of Coverage – Is Its Strategic Turnaround Working Out Well For Shareholders?

Mattel’s second quarter of 2024 presented a mixed set of results, reflecting both the challenges and strategic
progress within the toy industry. In terms of financial performance, net sales slightly declined by 1% but were
stable on a constant currency basis. This relatively flat sales trajectory indicates a degree of resilience amidst
broader economic fluctuations, with the company managing to maintain its sales levels year-over-year. The
marginal decline could signal caution regarding consumer spending, but also underscores stability in Mattel’s
core market positions. A notable positive from the earnings results was the adjusted gross margin, which saw a
significant increase of 430 basis points to 49.2%. This improvement in profitability showcases effective cost
management and operational efficiency, particularly in a period characterized by varying global market
conditions. It reflects well on Mattel’s ability to leverage its Optimizing for Profitable Growth program and benefit
from cost deflation, particularly in logistics and production areas.