Mattel (MAT) UBS Global Consumer and Retail Conference 2025 summary

Financial transformation and business evolution

• Adjusted EBITDA grew from $120M in 2017 to over $1B in 2024, with gross margin rising from the 30s to low 50s and free cash flow swinging from -$325M to $600M.

• Leverage ratio improved from 25x to 2.2x, achieving investment grade, and $1.4B in cash was held after $400M in share buybacks.

• Shifted from a toy manufacturer to an IP-driven company, focusing on managing global franchises and building emotional connections with fans.

• Reduced non-manufacturing workforce and SKUs by over 35%, and cut manufacturing factories, while growing top line by $500M.

• Early success in leveraging IP outside toys, exemplified by the Barbie movie and a broad, evergreen brand portfolio.

Industry outlook and growth drivers

• Toy industry declined less than 1% in 2024, outperforming expectations, and is expected to be flat to slightly up in 2025.

• Industry fundamentals remain strong, with toys seen as essential by parents and retailers, and growth driven by both unit and price.

• Digital experiences and declining birth rates have not derailed long-term industry growth.

• For 2025, growth is expected from both volume and price, with potential pricing actions due to tariffs.

• Product portfolio spans a wide price range, supporting diverse consumer segments.

Inventory, margin, and cost structure

• Year-end retail inventory levels were slightly elevated but of good quality, with modest Q1 headwinds expected from inventory, Easter timing, and FX.

• Full-year top line is expected to grow 2%-3% in constant currency.

• Cost savings program targets $200M by 2026, with 70% from COGS and 30% from SG&A, focusing on manufacturing footprint and operational efficiency.

• Investments in design, development, and advertising aim to improve speed to market and effectiveness.