Mattel, Inc. reported fourth quarter and full year 2020 financial results.
“This was a banner quarter for the company with our best performance in years. In the midst of a pandemic and very challenging market conditions, our results exceeded expectations, with another major upswing in topline and a significant increase in profitability, as we gained global market share and continued to transform Mattel into an IP-driven, high performing toy company. The fourth quarter and full year demonstrated the resilience of the toy industry and the priority that parents place on quality toys, trusted brands and purposeful play.
Our momentum was driven by the quality and breadth of our product offering, enduring strength of our brands, highly efficient supply chain, world-class commercial capabilities and very effective demand creation, in close collaboration with our retail partners. The continuous improvement in our performance puts us in a strong position from which we believe we can accelerate our growth.
I could not be more proud of the entire Mattel global team for having stepped up in an extremely tumultuous year to support our consumers, customers, business partners and communities where we live and work.”
Anthony DiSilvestro, CFO of Mattel said: “Mattel delivered another outstanding quarter of double-digit growth with broad-based gains across the portfolio and continued improvement in gross margin, and we are pleased with our performance for the full year. With a strong finish and positive start to 2021, we are providing guidance for the new year reflecting continued improvement in both our top and bottom line. Mattel also stands to benefit from our newly announced ‘Optimizing for Growth’ program and we believe we are well-positioned to continue this momentum.”
For the fourth quarter, Net Sales were up 10% as reported, and in constant currency, versus the prior year’s fourth quarter. Reported Operating Income was $192.7 million, an improvement of $125.1 million, and Adjusted Operating Income was $205.0 million, up $95.7 million. Reported Earnings Per Share was $0.37, an improvement of $0.37 per share. Adjusted Earnings Per Share was $0.40, an improvement of $0.29 per share.
For the year, Net Sales were up 2% as reported, including the unfavorable foreign exchange impact of $54.0 million, and up 3% in constant currency, versus the prior year. Reported Operating Income was $380.9 million, an increase of $341.6 million, and Adjusted Operating Income was $447.6 million, up $291.5 million. Reported Earnings Per Share was $0.36, an improvement of $0.98 per share. Adjusted Earnings Per Share was $0.54, an improvement of $0.84 per share.
Fourth Quarter 2020 Highlights
- Net Sales of $1,626 million, up 10% as reported, and in constant currency, versus prior year
- Reported Gross Margin of 51.4%, an improvement of 300 basis points; Adjusted Gross Margin of 51.4%, an improvement of 250 basis points
- Reported Operating Income of $192.7 million, an improvement of $125.1 million; Adjusted Operating Income of $205.0 million, an improvement of $95.7 million
- Reported Net Income of $130.5 million, an improvement of $130.4 million
- Adjusted EBITDA of $283.8 million, up 53%
Full Year 2020 Highlights
- Net Sales of $4,584 million, up 2% as reported, including the unfavorable foreign exchange impact of $54 million, and up 3% in constant currency, versus prior year
- Reported Gross Margin of 48.9%, an improvement of 490 basis points; Adjusted Gross Margin of 49.1%, an improvement of 420 basis points
- Reported Operating Income of $380.9 million, an improvement of $341.6 million; Adjusted Operating Income of $447.6 million, an improvement of $291.5 million
- Reported Net Income of $126.6 million, an improvement of $340.1 million
- Adjusted EBITDA of $719.0 million, up 59%
- Cash Flows Provided by Operating Activities of $289 million, an improvement of $108 million
- Free Cash Flow of $167 million, an improvement of $102 million, achieving positive Free Cash Flow for the second consecutive year
- Announcing new “Optimizing for Growth” program to drive greater productivity to accelerate growth and to further reduce costs, with expected savings of $250 million by 2023