Mattel Earnings: Sales on Track for a Flat Year, but Profits on the Rise Thanks to Cost Improvements
After experiencing supply chain issues and a weak holiday season in 2022, and then uneven sales in 2023, narrow-moat Mattel is finally on track for a more normal sales pattern in 2024. In the first quarter, the firm posted a less-than-1% sales decline to $810 million on growth in vehicles (up 5%) but weakness in the infant, toddler, and preschool, or ITPS, segment. Sales in this segment tumbled 10% and are now poised to generate around half the gross sales in 2024 as in 2016. While some of the recent ITPS sales decline stems from the out-licensing of lower-impact brands, further efforts to remediate issues in the segment could take some time, and we don’t expect to see meaningful evidence of improvement in ITPS until 2025.