Mattel, Inc.: Strengthening of Digital and Entertainment Offerings Driving Our Optimism!

Mattel, Inc., in its Third Quarter 2024 Earnings, presented a mixed financial picture characterized by a decline in revenue but enhancing profitability and cash flow positions. For the third quarter, Mattel experienced a decline in net sales by 4% as reported, and 3% in constant currency, primarily plagued by tough prior year comparisons due to the success of the Barbie movie. This decline in revenue was anticipated, and from a strategic perspective, focus was placed on other financial metrics, notably the strengthened gross margins and profitability. Adjusted gross margins illustrated a growth of 210 basis points reaching 53.1%. There was an overall improvement in EBITDA, cash flow, and a noted 6% growth in adjusted earnings per share. The commentary on the cash flow was particularly beneficial – the free cash flow in the trailing 12 months improved nearly 50% to $688 million compared to the same period a year ago.