Mattel(MAT) - 2024 Q4 - Annual Results

Financial Performance - Fourth quarter 2024 net sales increased by 2% to $1,646 million, or 3$5,380 million, or 0.5% in constant currency, compared to the prior year[4]. - Fourth quarter 2024 reported operating income was $158 million, an increase of$18 million, while adjusted operating income was $161 million, an increase of$14 million[5]. - Full year 2024 reported net income improved by $327 million to$542 million, with earnings per share increasing to $1.58 from$0.60[5]. - Gross margin for the fourth quarter 2024 increased to 50.7%, up 190 basis points from the prior year[8]. - Worldwide net sales for the year ended December 31, 2024, were $5,379.5 million, a slight decrease of 1$5,441.2 million in 2023[47]. - Net income for the year ended December 31, 2024, was $541.8 million, a significant increase of 153$214.4 million in 2023[40]. - Adjusted EBITDA for the year ended December 31, 2024, was $1,057.6 million, reflecting a 12$947.8 million in 2023[46]. Shareholder Returns - The company repurchased $400 million of shares in 2024 and plans to repurchase an additional$600 million in 2025[5]. - For the year ended December 31, 2024, Mattel reported a net income per common share of $1.58, a significant increase of 163$0.60 in 2023[44]. Sales by Region - The North America segment saw a 1% increase in net sales in the fourth quarter, while international net sales increased by 3%[6][7]. - North America net sales for Q4 2024 were $975.5 million, a 1$968.5 million in Q4 2023[49]. - International net sales for Q4 2024 reached $670.9 million, reflecting a 3$652.2 million in Q4 2023[50]. - EMEA region saw a 10% increase in net sales, totaling $402.6 million in Q4 2024, up from$366.5 million in Q4 2023[50]. - Latin America net sales decreased by 16% in Q4 2024, totaling $153.4 million compared to$182.4 million in Q4 2023[50]. - The Asia Pacific region experienced an 11% increase in net sales, totaling $114.9 million in Q4 2024, up from$103.3 million in Q4 2023[50]. Brand Performance - Worldwide gross billings for vehicles increased by 14% to $544 million in the fourth quarter, primarily driven by growth in Hot Wheels[17]. - Barbie brand gross billings decreased by 12$1,350.1 million in 2024 from $1,537.8 million in 2023[48]. - Hot Wheels brand gross billings increased by 10$1,575.0 million in 2024 compared to $1,432.4 million in 2023[48]. - Barbie brand gross billings decreased by 14$217.4 million compared to $252.8 million in Q4 2023[49]. - Hot Wheels brand gross billings increased by 11$220.3 million, up from $198.5 million in Q4 2023[49]. Operational Metrics - Adjusted Gross Profit and Adjusted Gross Margin are key metrics, with Adjusted Gross Margin providing insight into underlying trends in core profitability[27]. - Adjusted Operating Income and Adjusted Operating Income Margin exclude severance and restructuring expenses, offering a clearer view of operational performance[29]. - Adjusted Earnings Per Share reflects core business performance, adjusted for non-recurring items, providing a more accurate earnings measure[30]. - EBITDA and Adjusted EBITDA are critical for assessing business performance, with Adjusted EBITDA excluding non-core expenses[31]. - Free Cash Flow represents net cash from operating activities minus capital expenditures, crucial for evaluating liquidity[32]. - The Leverage Ratio, calculated as Total Debt divided by Adjusted EBITDA, helps gauge financial health and operational efficiency[33]. - Net Debt, which accounts for cash and equivalents, is a vital indicator for monitoring liquidity and balance sheet strength[34]. - Constant Currency metrics are used to analyze performance trends without the impact of exchange rate fluctuations, enhancing comparability[36]. - Gross Billings serve as a key performance indicator, reflecting amounts invoiced to customers and highlighting significant business trends[37]. Inventory and Cash Flow - Cash flows provided by operating activities for the year ended December 31, 2024, were$800.6 million, down from $869.8 million in 2023[42]. - Net cash flows provided by operating activities for the year ended December 31, 2024, were$800.6 million, down 8% from $869.8 million in 2023[46]. - The company reported a decrease in inventories to$501.7 million in 2024 from $571.6 million in 2023[41]. - The accounts receivable net days of sales outstanding (DSO) improved to 55 days in 2024 from 60 days in 2023[42]. - Free cash flow for the year ended December 31, 2024, was$597.9 million, down 16% from $709.5 million in 2023[46]. Debt and Taxation - The company’s long-term debt remained stable at$2,334.4 million as of December 31, 2024, compared to $2,330.0 million in 2023[41]. - The leverage ratio (Total Debt/Adjusted EBITDA) improved to 2.2x in 2024 from 2.5x in 2023[46]. - The tax rate as reported for 2024 was 17%, a decrease of 41 percentage points from 58% in 2023[45].