Mattel

Retail

Mattel CFO said pricing actions were “going well,” with little consumer response

Mattel’s CFO said the company was offsetting costs by increasing prices and planned to continue increasing prices through the end of 2021. “Anthony DiSilvestro, Chief Financial Officer: Sure. As we said in the remarks, pricing did have a benefit of 110 basis points in Q3, but that does not not yet reflect all the incremental pricing actions that we’re implementing in the second half. So, we should have a greater pricing benefit in Q4. That being said, our gross margin guidance implies a decline of about 300 basis points of gross margin in Q4. Obviously, the biggest driver of that is cost inflation, which we expect to partly offset with the pricing actions we’re implementing, as well as continued savings from our Optimizing for Growth program. It’s a little early to talk about 2022, and we look forward to providing guidance for ’22 on our fourth quarter earnings call. And lastly, I’ll just add, I mean, as Ynon stated in the remarks, we do expect to exceed $1 billion of adjusted EBITDA in 2022.”  (Mattel Inc Q3 2021 Earnings Call, 10/21/2021)

Mattel reported a much higher increase in income than in costs

In October 2021, Mattel reported that its third quarter net income surged 161% over the previous year, while costs had increased by 14%. “Third-quarter net income jumped 161% year-over-year to $812.6 million, or $2.29 per share, bolstered by a $510 million noncash benefit from the release of reserves on some deferred tax assets. Costs for the company increased 14% from a year ago to $919.8 million, which the company attributed to inflation. Those costs were slightly offset by higher pricing, the company said.” (Barron’s, 10/21/2021)

Mattel’s CFO: “… we are implementing those pricing actions. It’s going well. We haven’t seen any negative response in terms of consumer purchases that will continue to implement those programs.” Anthony DiSilvestro, Chief Financial Officer: “We’re not going to get specific on the magnitude of the pricing action, for competitive regions — reasons, but we are implementing those pricing actions. It’s going well. We haven’t seen any negative response in terms of consumer purchases that will continue to implement those programs.” (Mattel Inc Q3 2021 Earnings Call, 10/21/2021)