Mattel (MAT) Q3 2024 earnings summary

Executive summary

• Net sales for Q3 2024 were $1.84 billion, down 4% year-over-year, mainly due to tough Barbie movie comparisons.

• Gross margin expanded to 53.1%, up 210 basis points, driven by supply chain efficiencies, cost savings, and favorable FX.

• Net income rose to $372 million in Q3 2024, up 154% year-over-year; adjusted EPS increased to $1.14.

• Free cash flow for the trailing twelve months improved nearly 50% to $688 million.

• $268 million in share repurchases executed year-to-date under a $1 billion program.

Financial highlights

• Q3 2024 net sales: $1.84 billion (-4% YoY); Q3 net income: $372 million (+154% YoY); EPS: $1.09.

• Adjusted gross margin: 53.1% (+210 bps YoY); adjusted operating income margin: 27.3%.

• Adjusted EBITDA: $584 million (+1% YoY); adjusted EPS: $1.14 (+6% YoY).

• Free cash flow (TTM): $688 million (+49% YoY); cash at Q3-end: $724 million; total debt: $2.33 billion.

• Leverage ratio improved to 2.3x from 2.7x year-over-year; net debt: $1.61 billion.

Outlook and guidance

• FY2024 net sales expected to be comparable to slightly down in constant currency; Q4 growth anticipated.

• Adjusted gross margin guidance raised to ~50% (from 48.5–49%).

• Adjusted EPS guidance maintained at $1.35–$1.45; adjusted EBITDA: $975–$1,025 million.

• Free cash flow guidance for FY2024 raised to $200–$225 million; CapEx forecasted at $200–225 million.

• Adjusted tax rate guidance lowered to 21–22% (from 23–24%).