Speaker 1: This is Bloomberg Business Week with Carol Masser and Bloomberg
Speaker 1: Quick Takes Tim Stinovic from Bloomberg Radio. Well shares of
Speaker 1: Mattel they were up as much as eight percent in
Speaker 1: today's sessions, settling by the close up about six tents
Speaker 1: of a percent. This after the company posted third quarter
Speaker 1: results that exceeded expectations. They're working through their supply chain bottlenecks.
Speaker 1: We want to know more about that, that's for sure.
Speaker 1: Let's get to it and back with us. As Mattel
Speaker 1: CEO non cries he is on the phone in California.
Speaker 1: You know, I'm nice to have you here with us.
Speaker 1: How are you good, Carol, thank you for inviting me
Speaker 1: to the show. Well, it's so nice to have you
Speaker 1: back with us. Lots of questions, Um, what was the
Speaker 1: best of the quarter, What was the worst of the quarter. Well,
Speaker 1: you know, we we had another great quarter with strong
Speaker 1: consumer demand for our products. We achieved growth and gain
Speaker 1: market share, and now for five quarters in a row,
Speaker 1: we expect to continue growing. In the fourth quarter, we
Speaker 1: expect to gain market share and have a strong holiday season,
Speaker 1: and we we are on track to achieve our highest
Speaker 1: fullier growth rate in decades, just increased our guidance for
Speaker 1: the third time this year, so you know, we are definitive,
Speaker 1: performing at the high level and executing on our strategy
Speaker 1: and on a clear path to improve profitability and accelerate
Speaker 1: top line growth. Tim was riveted by my stories of
Speaker 1: growing up with barbies and loving them and inheriting the
Speaker 1: barbies from my older sisters. It was a big deal
Speaker 1: growing up. What what what's being bought? What are families
Speaker 1: buying for their kids? You know, we we really saw
Speaker 1: strong demand across the portfolio. We saw growth in um
Speaker 1: in the barbie, we saw growth in hot wheels, The
Speaker 1: entire U Darlls category grew, the vehicles category was growing,
Speaker 1: and then we saw really really strong growth in our
Speaker 1: action figures category that was up fifty percent in the
Speaker 1: quarter and seventy percent year to date. But this is
Speaker 1: really about the entire portfolio showing strength. We're actually grew.
Speaker 1: Uh we grew market share in our three core categories
Speaker 1: where we are global later, in two of our challenging categories,
Speaker 1: and in each of our four regions. So the performance
Speaker 1: was comprehensive pretty much across the board. You know, how
Speaker 1: were you able to successfully work through supply chain challenges.
Speaker 1: It's been a couple of minutes since we started the interview,
Speaker 1: and it's shocking that we haven't talked about the supply
Speaker 1: chain yet because it is, but it has, it really
Speaker 1: has been dominating every earnings report and every call that
Speaker 1: we hear from companies this quarter. What specifically were you
Speaker 1: able to do in the most recent quarter and what
Speaker 1: are you doing in this quarter to alleviate the pressures
Speaker 1: that you're facing when it comes to the supply challenges. Yes,
Speaker 1: I mean, look, our supply chain and commercial organizations were
Speaker 1: very successful in working through global subvention disruptions in trying
Speaker 1: to meet consumer demand. It's not that we were not impacted,
Speaker 1: but we did anticipate your supply and longer lead times
Speaker 1: in factor that into our planning with very specific mitigating actions.
Speaker 1: And this is really where our scale, expertise and flexible
Speaker 1: supply chain model, which we restructured over the last three years.
Speaker 1: It's plain to our advantage and we are ready for
Speaker 1: a strong holiday season. But do you have barbies and
Speaker 1: hot wheels right now stuck in ships and containers that
Speaker 1: off the coast of the Port of l A right now, Well,
Speaker 1: we actually have sufficient inventory we have the capacity and
Speaker 1: we are ready for you know, for for the season.
Speaker 1: We we we have our writtle orders that we see strong,
Speaker 1: We have our written promotional plans in place, and we
Speaker 1: believe we have the inventor in the capacity to meet
Speaker 1: our our new new guidance for the year and expect
Speaker 1: to have lots of toys under the trees, um for
Speaker 1: for you know, for the holiday season. Well, so let's
Speaker 1: let's dig a little bit deeper into that, you know,
Speaker 1: because one of the things that we've been wondering, and
Speaker 1: we saw it during the pandemic where people were just
Speaker 1: hoarding and buying tons of stuff and stocking their cupboards,
Speaker 1: and companies can do the same thing by doing advance
Speaker 1: buying and just kind of overstocking. Um people do it
Speaker 1: with unit sales or something or certain commodities. You know,
Speaker 1: how much did you kind of overstocked potentially or by
Speaker 1: to make sure that your shelves that you had sufficient
Speaker 1: inventories for this season, Because it sounds like you've got
Speaker 1: or already what you think you're going to need for
Speaker 1: the holiday season where they need to be already that
Speaker 1: you're not worried about it being stuck on on ships
Speaker 1: out and sea. Is that fair to say? Yeah? You know,
Speaker 1: we as I said, this is not that we don't
Speaker 1: see issues. We do work for those challenges and still
Speaker 1: expect to achieve growth in the fourth quarter and growth
Speaker 1: growth in the holiday season. Right we are working very
Speaker 1: closely with our retail partners who look to have the
Speaker 1: right product at the right time with the right retailer.
Speaker 1: We're seeing the man remaining strong and do what we
Speaker 1: can to try and meet all of it. We may
Speaker 1: not be able to meet all of the demand, but
Speaker 1: we do what we can to try and meet and
Speaker 1: still expect to grow in the season. So may not
Speaker 1: be able to meet all the demand on the flip side,
Speaker 1: you know. And is it possible that you over order
Speaker 1: or overproduce at this point, I guess I overproduced for
Speaker 1: you know, and that you're left with stock after the
Speaker 1: holiday season. That's possible to now, we don't believe this
Speaker 1: is the case. If anything, we are chasing demand. The
Speaker 1: man is outpacing capacity right now and we are chasing it. Uh.
Speaker 1: You know, this is what we do. This is exactly
Speaker 1: the core competence of the company. Uh. And we traditionally
Speaker 1: excelled during the holiday season. It does take a lot
Speaker 1: of planning. You know, we create the man and then
Speaker 1: we try to it and we work closely with the
Speaker 1: retailers to care for this demand and be able to
Speaker 1: uh to meet the needs of of our of our consumers.
Speaker 1: We talked earlier this year Enon and the narrative really
Speaker 1: was around the idea of parents and grandparents spoiling their
Speaker 1: kids as a result of COVID lockdowns, hybrid schooling as
Speaker 1: things start to open up, as kids potentially under the
Speaker 1: age of twelve could get vaccinated very soon, are you
Speaker 1: concerned that demand will dry up and kids will start
Speaker 1: doing experiential things rather than buying things. You know, the
Speaker 1: tour industry was expected to grow before the pandemic, and
Speaker 1: and and and and we we believe it is a
Speaker 1: growth category on the other side of the pandemic. It
Speaker 1: is fair to say that the pandemic did stimulate demand,
Speaker 1: but you know, it wasn't all positive. They're also headwinds,
Speaker 1: as we know in terms of supply chain, COVID related lockdowns,
Speaker 1: written closures, and other factors that impeded demand. But that said,
Speaker 1: we haven't just at Mattel, you know, we just we
Speaker 1: haven't just tagged onto the industry. We grew almost double
Speaker 1: the industry growth rate in the quarter UM and and
Speaker 1: near today. In fact, we even accelerated market share gains
Speaker 1: in the third quarter. So we're not you know, we're
Speaker 1: not just riding the wave of COVID related demand, but
Speaker 1: we're actually ahead of the industry and do what we
Speaker 1: can to continue to innovate and create great product that
Speaker 1: inspires and detained and developed children through play. Hey, you know,
Speaker 1: I was both of us, Tim and I were at
Speaker 1: the Milk and Institute Global Conference this past week. It
Speaker 1: feels like a week ago, but it was just the
Speaker 1: earlier this week, and I hosted a panel with Global
Speaker 1: m and A. And one of the things that came
Speaker 1: up is that yes, companies are continuing to do deals.
Speaker 1: We're on track for a record year virtually, perhaps maybe
Speaker 1: even five children. But the other thing that they said
Speaker 1: that's happening a lot of is alliances. And I think
Speaker 1: the partnerships that you do, whether it's w w E
Speaker 1: or with Disney, are important to your growth story. Tell
Speaker 1: me about like the renewed partnership with w w E.
Speaker 1: How does that help Mattel specifically on the top and
Speaker 1: bottom line with with our increased capability and the stronger
Speaker 1: platform that we have built, we have more more capacity
Speaker 1: to uh grow partnerships. This is something that we were
Speaker 1: less focused on in the past given the strength of
Speaker 1: our own catalog, but we now can expand our business
Speaker 1: through the part through these partnerships with with you know,
Speaker 1: with with key players, with very important franchises, global franchises,
Speaker 1: in addition to what we do with our own catalog.
Speaker 1: So the w w E is a great example of
Speaker 1: renewing a long term relationship for a really great action
Speaker 1: figure franchise. And you know, likewise, also we just expanded
Speaker 1: our relationship with Disney for the Pixel movie Light here.
Speaker 1: This is the origin story of Brand's Light here, which
Speaker 1: is expected to be very toy added, very playful, great
Speaker 1: movie um and a lot of really exciting products. We
Speaker 1: have the global licensing rights to develop the toy line
Speaker 1: and expect expect to launch that in the summer of
Speaker 1: So another opportunity for us, another growth growth and liver
Speaker 1: for Matteil leveraging the scale, averaging network of more than
Speaker 1: four hundred and seventy thousand doors where we sell our products.
Speaker 1: You know what I'm wondering about, Mattel Television thirteen shows
Speaker 1: in production, thirty plus or in development new content on Netflix.
Speaker 1: Help us draw the line and help our investors our
Speaker 1: audience draw the line from Netflix content and what kids
Speaker 1: see on the screen and what parents see on the
Speaker 1: screen to the actual moving of products off of shelves
Speaker 1: or or or online. This is about capturing the full
Speaker 1: value of our intellectual property, which which is the mid
Speaker 1: too long term part of our strategy. And what we
Speaker 1: say is that in addition to what we do on
Speaker 1: the toy side of our business, where we see a
Speaker 1: lot of room to grow and improve profitability, we can
Speaker 1: also extend into highly a creative verticals that are directly
Speaker 1: adjacent to the toy industry, all driven by big franchises,
Speaker 1: big brands that's rise above the noise level and can
Speaker 1: become successful a creative businesses in and of themselves. So
Speaker 1: MATEL Film, MATEL Television, our digital gaming business, digital experiences, UH,
Speaker 1: licensing and merchandising music, all our verticals where we can
Speaker 1: participate and have to more value given the strength of
Speaker 1: our catalog. And as you mentioned, Mattel Television is not
Speaker 1: arriving with many shows eight shows this yer alone. Yeah,
Speaker 1: and you know, just got about ten seconds. What's your
Speaker 1: favorite toy? I know is that I always ask you that,
Speaker 1: do you get a new one? I have so many
Speaker 1: favorite stories. Look out for the new Barbee Dreymhouse. Always Drymhouse,
Speaker 1: always a classic. The new Dreymhouse is incredible. Alex Steele's
Speaker 1: daughter wants that I know that all right Universe series.
Speaker 1: In my house, it's all about Thomas and friends. Of
Speaker 1: course it is. Hey, you know, be well and hopefully
Speaker 1: we'll talk to you through the holiday season. In On cries,
Speaker 1: Chairman and chief executive officer at Mattel