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Mar 31, 2020
Mattel Q1 2020 Earnings Report
Mattel's financial performance was impacted by COVID-19, but gross margin improved.
Key Takeaways
Mattel reported a decrease in net sales by 14% and gross sales by 14%. The reported operating loss was $150 million. The company is withdrawing its previous 2020 guidance due to uncertainty related to COVID-19.
Net sales decreased by 14% as reported, and 12% in constant currency.
Gross sales decreased by 14% as reported, and 12% in constant currency.
Reported gross margin improved by 820 basis points.
Mattel is withdrawing previous 2020 guidance due to COVID-19 uncertainty.
Mattel
Mattel
Mattel Revenue by Segment
Forward Guidance
Mattel is withdrawing its previous 2020 guidance due to the high level of uncertainty around the impact of COVID-19.
Positive Outlook
- Global manufacturing and distribution capacity largely restored.
- Operations are on the right path to meet production needs for the second half of the year, leading up to and including the holiday season.
- New promotions and marketing activation initiatives were tailored to the new consumer behaviors.
- Joint business plans with retailers are being accelerated to compensate for the disruption and adapt to the retail environment, including transition to online retail and omni-channel experience.
- Mattel Playroom, a free online platform that offers parents and caregivers a centralized resource for activities, expert advice, games, and content from our iconic brands was launched.
Challenges Ahead
- Potential impacts of the COVID-19 pandemic on business operations, financial results and financial position and on the global economy, including its impact on sales.
- Downturns in economic conditions affecting Mattel’s markets which can negatively impact retail customers and consumers, and which can result in lower employment levels, lower consumer disposable income and spending, including lower spending on purchases of Mattel’s products.
- Other factors which can lower discretionary consumer spending, such as higher costs for fuel and food, drops in the value of homes or other consumer assets, and high levels of consumer debt.
- Potential difficulties or delays Mattel may experience in implementing cost savings and efficiency enhancing initiatives.
- Other economic and public health conditions or regulatory changes in the markets in which Mattel and its customers and suppliers operate, which could create delays or increase Mattel’s costs, such as higher commodity prices, labor costs or transportation costs, or outbreaks of disease.
Revenue & Expenses
Visualization of income flow from segment revenue to net income