1 00:00:00,040 --> 00:00:01,920 Speaker 1: We're talking about Mittel, and lucky for us, we do 2 00:00:01,960 --> 00:00:04,080 Speaker 1: have inon Christ. He is the chairman and Cey of Mittel. 3 00:00:04,080 --> 00:00:07,760 Speaker 1: He's on Zoom from El Segundo, California. It's so great 4 00:00:07,760 --> 00:00:09,320 Speaker 1: to be with you. I feel like I have a 5 00:00:09,360 --> 00:00:11,240 Speaker 1: million questions. I feel like I want to go to 6 00:00:11,280 --> 00:00:12,680 Speaker 1: a bar, have a drink with you and just sit 7 00:00:12,720 --> 00:00:16,840 Speaker 1: and talk. I want to start with the Israel Hamas conflict. 8 00:00:17,320 --> 00:00:22,480 Speaker 1: You're born in Israel, studied at Tel Aviv University before 9 00:00:22,520 --> 00:00:24,960 Speaker 1: heading to the West coast of the United States of America. 10 00:00:26,079 --> 00:00:28,960 Speaker 1: I hope your family and friends are safe. I pray 11 00:00:29,000 --> 00:00:31,840 Speaker 1: that they are safe. How are you thinking about all 12 00:00:31,880 --> 00:00:34,080 Speaker 1: of this right now, in this conflict and is there 13 00:00:34,200 --> 00:00:36,120 Speaker 1: a way to peace in that region? 14 00:00:37,200 --> 00:00:42,320 Speaker 2: Yeah, thank you for asking my family. My family is okay, 15 00:00:42,840 --> 00:00:45,960 Speaker 2: My immediate family is okay. But and you know, of course, 16 00:00:46,159 --> 00:00:49,559 Speaker 2: in Israelia, this is very personal to me, and I 17 00:00:49,600 --> 00:00:52,920 Speaker 2: know too many people who lost loved ones or have 18 00:00:53,280 --> 00:00:56,240 Speaker 2: relatives that have been kidnapped and are now being held 19 00:00:56,400 --> 00:01:00,960 Speaker 2: hostage in Gaza. You know, on behalf of Mattel, we 20 00:01:01,120 --> 00:01:06,240 Speaker 2: condemned the terrorism and atrocities perpetrated by Hamas and stand 21 00:01:06,280 --> 00:01:10,640 Speaker 2: against hate and violence in all forms. We express hope 22 00:01:11,160 --> 00:01:14,560 Speaker 2: for the safety of Israelis and Palestine and children and 23 00:01:14,640 --> 00:01:19,760 Speaker 2: families part in the Israeli Hamas war. As a company. 24 00:01:19,840 --> 00:01:24,000 Speaker 2: Since the Hamas attacks on October seventh, the Mattel Children's 25 00:01:24,040 --> 00:01:28,280 Speaker 2: Foundation has been focused on humnyitarian work, including cash and 26 00:01:28,360 --> 00:01:33,480 Speaker 2: toy donations with shelters and hospitals who support children who 27 00:01:33,480 --> 00:01:37,160 Speaker 2: are suffering. And we're sitting here all wishing for a 28 00:01:37,240 --> 00:01:41,600 Speaker 2: swift resolution to the war and more peaceful times in 29 00:01:41,640 --> 00:01:42,160 Speaker 2: the future. 30 00:01:44,560 --> 00:01:47,319 Speaker 3: Well, you know, and it's something that you know, people 31 00:01:47,319 --> 00:01:51,200 Speaker 3: who are wow, gosh, I mean up to eighty years 32 00:01:51,200 --> 00:01:53,360 Speaker 3: old at this point have dealt with their entire lives 33 00:01:53,480 --> 00:01:56,640 Speaker 3: in that area of the world. And I'm wondering to 34 00:01:57,280 --> 00:01:59,320 Speaker 3: you and not speaking on behalf of Mattel, but just 35 00:01:59,400 --> 00:02:02,560 Speaker 3: getting your thoughts personally, how this ends, if a two 36 00:02:02,560 --> 00:02:04,920 Speaker 3: state outcome is the only solution to ending the conflict 37 00:02:04,920 --> 00:02:05,760 Speaker 3: there once and for all. 38 00:02:07,720 --> 00:02:14,280 Speaker 2: You know, it's a complicated conflict, and now, sitting at 39 00:02:14,320 --> 00:02:18,320 Speaker 2: a time that is very volatile, we see risk of 40 00:02:19,120 --> 00:02:24,800 Speaker 2: escalation and we just hope for a swift resolution and 41 00:02:25,440 --> 00:02:28,040 Speaker 2: wishing peace for everybody as soon as we can. 42 00:02:30,000 --> 00:02:31,680 Speaker 1: I want to talk about Mattel. I have one more 43 00:02:31,800 --> 00:02:34,400 Speaker 1: questions for you. Do you think Prime Minister Benjamin Netanya 44 00:02:34,520 --> 00:02:37,440 Speaker 1: who is not going to be the leader that brings 45 00:02:37,520 --> 00:02:38,200 Speaker 1: lasting peace. 46 00:02:40,160 --> 00:02:43,400 Speaker 2: And this is not the time to get into the 47 00:02:43,440 --> 00:02:48,320 Speaker 2: political discussion right now. Everyone is focused on resolving the situation. 48 00:02:49,639 --> 00:02:56,160 Speaker 2: Israel articulated its priorities. We're all really looking forward for 49 00:02:56,200 --> 00:03:01,240 Speaker 2: the release of the hostages. There are thirty children under 50 00:03:01,240 --> 00:03:04,160 Speaker 2: the edge of sixteen that are being held at captive 51 00:03:04,240 --> 00:03:08,520 Speaker 2: right now, about half the hostages of women, and we 52 00:03:08,639 --> 00:03:10,640 Speaker 2: really believe that this should be a results as soon 53 00:03:10,680 --> 00:03:14,240 Speaker 2: as possible, and we pray for the release, safety and 54 00:03:14,280 --> 00:03:19,079 Speaker 2: release of all the hostages that are now being held captives. 55 00:03:21,240 --> 00:03:24,200 Speaker 1: You are absolutely right, but we do appreciate you weighing 56 00:03:24,200 --> 00:03:26,120 Speaker 1: in on this because we have talked to you about 57 00:03:26,320 --> 00:03:30,280 Speaker 1: serious issues in the past, so really appreciate this. No 58 00:03:30,360 --> 00:03:32,360 Speaker 1: easy segue, but I do want to talk about the 59 00:03:32,400 --> 00:03:36,680 Speaker 1: business of Mattel. Talk to us about last quarter and 60 00:03:36,720 --> 00:03:40,320 Speaker 1: the outlook. It was a tough day in the equity 61 00:03:40,360 --> 00:03:44,640 Speaker 1: market for you guys. You did talk about tougher industry conditions. 62 00:03:44,680 --> 00:03:47,560 Speaker 1: What are those tougher industry conditions that you guys are 63 00:03:47,560 --> 00:03:48,200 Speaker 1: worried about? 64 00:03:50,520 --> 00:03:55,160 Speaker 2: What they see the industry being soft in the third 65 00:03:55,240 --> 00:03:57,520 Speaker 2: quarter and year to date, and as a result, we 66 00:03:58,440 --> 00:04:02,080 Speaker 2: adjusted our expectation and expect and believe the industry will 67 00:04:02,080 --> 00:04:05,880 Speaker 2: decline mixing a digit for the full year. But don't 68 00:04:06,400 --> 00:04:09,920 Speaker 2: you need to remember that this is after the industry 69 00:04:10,360 --> 00:04:14,600 Speaker 2: was up twenty two percent from twenty nineteen to twenty 70 00:04:14,640 --> 00:04:18,839 Speaker 2: twenty two, reaching an all time high. So coming off 71 00:04:19,080 --> 00:04:24,799 Speaker 2: after such a strong increase, especially in a challenging microeconomic environment, 72 00:04:25,920 --> 00:04:29,880 Speaker 2: we believe that this is a reasonable situation and doesn't 73 00:04:30,600 --> 00:04:34,600 Speaker 2: reflect on the strength and resilience of the industry long term. 74 00:04:34,640 --> 00:04:37,560 Speaker 2: The toy industry has been growing for over ten years 75 00:04:37,839 --> 00:04:40,719 Speaker 2: and it's a growth category. So we feel very good 76 00:04:40,720 --> 00:04:44,480 Speaker 2: about the industry and it's a growth process. And even 77 00:04:44,560 --> 00:04:49,919 Speaker 2: in that environment, even in a softer market, Mattel performed 78 00:04:50,000 --> 00:04:57,039 Speaker 2: very strongly. Our quarter exceeded, our quarterly result exceeded expectations. 79 00:04:57,320 --> 00:05:01,960 Speaker 2: We showed manyful sales groot margin expansion with very strong 80 00:05:02,000 --> 00:05:07,400 Speaker 2: free cashrow. Indorse, we saw consumer dement increasing and we 81 00:05:07,520 --> 00:05:08,919 Speaker 2: continue to outfress the industry. 82 00:05:10,880 --> 00:05:13,080 Speaker 3: I think a lot of investors today, at least sending 83 00:05:13,120 --> 00:05:16,839 Speaker 3: shares down about seven percent, were concerned that you guys, 84 00:05:16,880 --> 00:05:19,800 Speaker 3: maintained your full year sales outlook despite all of the 85 00:05:19,839 --> 00:05:23,359 Speaker 3: success of the Barbie Movie. So what would have to 86 00:05:23,400 --> 00:05:25,920 Speaker 3: happen enon to bring in more than the one hundred 87 00:05:25,960 --> 00:05:28,640 Speaker 3: and twenty five million dollars expected from the Barbie Movie 88 00:05:28,880 --> 00:05:31,400 Speaker 3: and related products? What needs to happen at MATEL or 89 00:05:31,400 --> 00:05:33,560 Speaker 3: in the industry for that to happen or for the consumer? 90 00:05:33,600 --> 00:05:39,240 Speaker 4: I should say, well, while we maintain the top line expectations, 91 00:05:39,720 --> 00:05:44,279 Speaker 4: we increase our autsook for a ghost margin for our 92 00:05:44,320 --> 00:05:47,920 Speaker 4: EPs and EBIDA, and still expect a very strong free 93 00:05:47,960 --> 00:05:49,960 Speaker 4: cash flows to float through. 94 00:05:50,960 --> 00:05:53,880 Speaker 2: What they change is that relative to our initial expectation 95 00:05:53,960 --> 00:05:56,400 Speaker 2: at the start of the year is that the industry 96 00:05:56,960 --> 00:06:02,000 Speaker 2: we believe will now decline amidst of but the fundamentals 97 00:06:02,040 --> 00:06:05,719 Speaker 2: are strong. We do expect an accelerated growth rate in 98 00:06:05,760 --> 00:06:10,400 Speaker 2: the fourth quarter and significant expansion and growth margin compared 99 00:06:10,400 --> 00:06:13,440 Speaker 2: to the prior year, and for consumer demands to be 100 00:06:14,160 --> 00:06:18,680 Speaker 2: positive for Mattel in the holiday season, in the fourth 101 00:06:18,800 --> 00:06:23,520 Speaker 2: quarter and the full year. So we are performing strongly. 102 00:06:23,560 --> 00:06:29,000 Speaker 2: We're heading into the fourth quarter seeing stronger support from retailer, 103 00:06:29,640 --> 00:06:36,320 Speaker 2: more shelf space, more representation in major holiday catalogs, and overall, 104 00:06:37,000 --> 00:06:40,480 Speaker 2: a strong position with a very broad based offering, a 105 00:06:40,640 --> 00:06:44,880 Speaker 2: product across a stay patterns, frash points, and we believe 106 00:06:44,880 --> 00:06:47,360 Speaker 2: we have very well positioned competitives. 107 00:06:49,080 --> 00:06:51,960 Speaker 1: So just to follow up there, the one hundred and 108 00:06:51,960 --> 00:06:54,960 Speaker 1: twenty five million that you put out there, the estimate 109 00:06:55,160 --> 00:06:58,400 Speaker 1: from the Barbie movie and related products, would you say 110 00:06:58,440 --> 00:07:00,240 Speaker 1: it might be even conservative a little bit on. 111 00:07:02,000 --> 00:07:05,120 Speaker 2: Well, we did say it's at least one hundred and 112 00:07:05,120 --> 00:07:10,080 Speaker 2: twenty five million dollars revenue at sixty percent operating income margin. 113 00:07:11,320 --> 00:07:11,600 Speaker 4: But the. 114 00:07:13,320 --> 00:07:17,440 Speaker 2: Takeaway from this is that this is one movie in 115 00:07:17,520 --> 00:07:21,880 Speaker 2: one year, and as we continue to scale our strategy 116 00:07:22,240 --> 00:07:26,680 Speaker 2: and have more movies, more executions, and not just in film, 117 00:07:26,720 --> 00:07:31,200 Speaker 2: but also in television, in location based entertainment, theme parks, 118 00:07:31,200 --> 00:07:37,000 Speaker 2: consumer products, digital experiences, music, and other verticals in some 119 00:07:37,080 --> 00:07:40,760 Speaker 2: cases that are actually bigger than the toy industry. We 120 00:07:40,880 --> 00:07:45,280 Speaker 2: believe that we have an opportunity to capture significant value 121 00:07:45,280 --> 00:07:48,720 Speaker 2: from our franchisees. And we're not saying that everything Let's 122 00:07:48,760 --> 00:07:51,480 Speaker 2: Go there would be as successful as Barbie, but we 123 00:07:51,520 --> 00:07:55,800 Speaker 2: absolutely believe that in the aggregate there's a meaningful opportunity 124 00:07:55,840 --> 00:07:56,600 Speaker 2: for us. 125 00:07:57,840 --> 00:07:59,720 Speaker 1: Well let's go there, and I've got to say, you 126 00:07:59,720 --> 00:08:01,440 Speaker 1: know our remember when we started talking to you or 127 00:08:01,520 --> 00:08:03,480 Speaker 1: you was it the early days of the Barbie Movie 128 00:08:03,840 --> 00:08:05,560 Speaker 1: or you started filming. So it was kind of fun 129 00:08:05,600 --> 00:08:07,400 Speaker 1: to be along for that process. But it was a 130 00:08:07,440 --> 00:08:09,240 Speaker 1: movie that made us laugh, made us cry, and like 131 00:08:09,280 --> 00:08:12,200 Speaker 1: I said, it appealed to a lot of different ages, 132 00:08:12,240 --> 00:08:15,520 Speaker 1: which was pretty pretty wild. So what are the key 133 00:08:15,600 --> 00:08:19,800 Speaker 1: brands that you think have life beyond a kid's toy 134 00:08:19,880 --> 00:08:22,520 Speaker 1: chest and that you think we should be all kind 135 00:08:22,560 --> 00:08:24,840 Speaker 1: of waiting for. I don't know whether it's six months, 136 00:08:24,880 --> 00:08:26,760 Speaker 1: twelve months, the next couple of years that are going 137 00:08:26,840 --> 00:08:29,320 Speaker 1: to be brought to life in different ways. 138 00:08:29,680 --> 00:08:33,520 Speaker 2: Well, the division of Mattel's Films is to collaborate with 139 00:08:33,640 --> 00:08:37,880 Speaker 2: leading filmmakers to create stand out quarterly movies based on 140 00:08:37,920 --> 00:08:41,600 Speaker 2: our iconic brands that will resonate in culture and appear 141 00:08:41,679 --> 00:08:44,880 Speaker 2: to global audiences. And the Barbie Movie and I'm glad 142 00:08:44,960 --> 00:08:49,000 Speaker 2: you enjoyed it as much as you did, is a 143 00:08:49,120 --> 00:08:50,559 Speaker 2: clear showcase. 144 00:08:50,240 --> 00:08:53,280 Speaker 1: Did and we have brought me back to the theater 145 00:08:53,400 --> 00:08:54,199 Speaker 1: for the first time. 146 00:08:56,440 --> 00:08:59,680 Speaker 2: I'd have to hear that. And we have fourteen other 147 00:08:59,760 --> 00:09:05,000 Speaker 2: movies in development right now, different demographics, different genres. We 148 00:09:05,160 --> 00:09:09,960 Speaker 2: have Hot Wheels in development with JJ Abrams as Warner Brothers, 149 00:09:10,880 --> 00:09:14,760 Speaker 2: Matchbox in development with sky Dams, which, as you know, 150 00:09:14,840 --> 00:09:21,000 Speaker 2: produced the Mission Impossible movie that did very well, and 151 00:09:21,080 --> 00:09:24,160 Speaker 2: Top Dan We have a movie in development with Vin 152 00:09:24,200 --> 00:09:29,000 Speaker 2: Diesel around rockin Stock and Robots Parley Pocket with Lena 153 00:09:29,080 --> 00:09:34,079 Speaker 2: Danham and Lily Collins. And we have a Wishbone in 154 00:09:34,120 --> 00:09:38,320 Speaker 2: development with Pitt Farley major Matt Mason with Tom Hanks 155 00:09:38,520 --> 00:09:43,040 Speaker 2: as a star, Thomas the Tank with Mark Forrester as director, 156 00:09:43,720 --> 00:09:47,080 Speaker 2: and the list goes on and off. So we really well. 157 00:09:46,960 --> 00:09:49,120 Speaker 3: You know, it's very good that you're so close to 158 00:09:49,160 --> 00:09:52,040 Speaker 3: Hollywood out there. Yeah, it's good that you're so close 159 00:09:52,040 --> 00:09:54,360 Speaker 3: to Hollywood out there. Nel Segundo, Hey, we only have 160 00:09:54,440 --> 00:09:56,480 Speaker 3: about thirty seconds left. I'd love to hear comments on 161 00:09:56,480 --> 00:09:58,680 Speaker 3: the consumer going into the holiday season. Are you seeing 162 00:09:58,679 --> 00:09:59,920 Speaker 3: signs of weakness in the consumer. 163 00:10:01,280 --> 00:10:05,600 Speaker 2: Well, we expect a strong holiday season for Mattel. We 164 00:10:05,679 --> 00:10:08,520 Speaker 2: believe our retail partners and the industry as a whole 165 00:10:08,640 --> 00:10:12,440 Speaker 2: is well prepared for the season and were very excited 166 00:10:12,480 --> 00:10:15,680 Speaker 2: to be able to care consumers of all ages with 167 00:10:15,840 --> 00:10:18,079 Speaker 2: a great product for in the holiday. 168 00:10:19,800 --> 00:10:21,160 Speaker 1: I'm going to get yelled at, but I'm going to 169 00:10:21,240 --> 00:10:24,280 Speaker 1: ask twenty seconds what's the hot toy for Christmas and 170 00:10:24,320 --> 00:10:27,280 Speaker 1: the holidays and for Hanukah, what is the hot toy? 171 00:10:28,160 --> 00:10:33,200 Speaker 2: Well, anything Barbie is a hot toy, especially even before 172 00:10:33,200 --> 00:10:37,480 Speaker 2: the holiday. For the spirit Halloween Barbie costume, watch out 173 00:10:37,520 --> 00:10:41,000 Speaker 2: for that. But of course hot Wheels is always the winner. 174 00:10:42,120 --> 00:10:46,240 Speaker 2: The basic car assortment and the five car pack assortment, 175 00:10:46,920 --> 00:10:49,559 Speaker 2: and look out for the monster high four dollar assortment. 176 00:10:50,080 --> 00:10:54,520 Speaker 2: And you know that will it will be very will 177 00:10:54,559 --> 00:10:57,920 Speaker 2: be hot selling toys for the holiday season in on 178 00:10:58,040 --> 00:11:00,319 Speaker 1: Christ Thank you so much, Chearity Mittel