Kylie Cohu

Kylie Cohu inquired about the holiday performance of Mattel's products, specifically comparing items under $20 to big-ticket items, and sought insights into customer behavior and health heading into 2026. She also asked about current retail inventory levels and whether retailers are maintaining their conservative approach.

Answer

Mattel's CFO, Paul Ruh, stated that Q4 saw an elevated promotional environment and a price-sensitive consumer seeking deals, which Mattel addressed to manage inventory effectively. He confirmed that retail inventory finished lower in absolute terms compared to the prior year, indicating continued caution from retailers and an ongoing shift from direct import to domestic orders into 2026.

Kylie Cohu asked about the holiday performance of products priced under $20 compared to big-ticket items, and any insights into customer behavior and health heading into 2026.

Answer

Paul Ruh (CFO, Mattel) noted an elevated promotional environment in Q4, with Mattel taking actions to manage inventory and support retailers, which impacted margins but positioned the company well for 2026. He observed a price-sensitive consumer actively seeking deals in December, to which Mattel responded promptly. Kylie Cohu also inquired about current retail inventory levels, whether retailers are maintaining a conservative approach, and the ongoing shift from direct import (DI) to domestic orders. Paul Ruh (CFO, Mattel) stated that retail inventory finished lower in absolute terms compared to the prior year, indicating continued cautious inventory management by retailers. He also confirmed the ongoing shift from direct import to domestic orders into 2026.

Kylie Cohu of Jefferies inquired about the primary factors driving the high and low ends of Mattel's revised 2025 guidance and which expenses offer the most flexibility.

Answer

CFO Paul Ruh explained that the guidance range accounts for a lowered top-line forecast, the P&L impact of tariffs, and various mitigating actions. These mitigants include the 'Optimizing for Profitable Growth' program, supply chain efficiencies, and strategic pricing. Ruh noted that the primary variable remains top-line performance amid macroeconomic uncertainty.

Kylie Cohu asked about the magnitude of pricing action required to offset tariffs, any analysis on price elasticities, and the state of inventory levels following the Easter holiday.

Answer

CFO Anthony DiSilvestro avoided specifics on pricing amounts but highlighted a strategic approach and noted that historical price elasticity studies are less reliable in the current environment. He confirmed that both owned and retail inventory levels are appropriate, with retail inventories slightly up due to the later Easter holiday and a buildup for upcoming movie-related product launches.

Kylie Cohu asked for more detail on the 'Optimizing for Profitable Growth Program,' including what was driving its success and if the $200 million target would change. She also requested an update on international market performance.

Answer

CFO Anthony DiSilvestro stated the program is off to a great start, having already hit the original full-year target of $60 million in savings, leading to an increased 2024 forecast of $75 million. He expressed confidence in the $200 million goal by 2026 but did not change it. CEO Ynon Kreiz commented that international execution remains strong with no specific regional issues to call out.

Kylie Cohu asked for a description of the sell-through or point-of-sale (POS) cadence for toys throughout Q4 2025, and if there was anything unusual to note.

Answer

CEO Chris Cocks stated that Hasbro felt good about toy point-of-sale performance, despite the impact of SNAP benefits being taken away due to a government shutdown. He noted that Hasbro gained market share in its key categories for 16 to 18 out of 20 weeks from September through December, expecting this momentum to continue into 2026.

Kylie Cohu asked about the sell-through or point-of-sale (POS) cadence for toys throughout the fourth quarter of 2025, inquiring if there was anything unusual to highlight.

Answer

CEO Chris Cocks stated that for toys, Hasbro felt good about the POS direction, despite the impact of SNAP benefits being taken away due to the government shutdown. He noted that from September through the end of December, Hasbro gained market share in its key categories for 16, 17, or even 18 out of 20 weeks, indicating strong momentum that is expected to continue into 2026.

Kylie Cohu from Jefferies Financial Group Inc. inquired about the customer mix for Magic: The Gathering between new, lapsed, and existing players, and asked for more detail on the factors driving the increase in inventory levels in Q2.

Answer

CEO Chris Cocks stated that while he couldn't provide a precise quantitative breakdown, the mix of new players is stronger this year than in prior years, with all metrics indicating robust growth. CFO & COO Gina Goetter explained the inventory increase was driven by three factors: the added cost of tariffs, foreign exchange impacts, and holding more domestic inventory due to retailers slowing their direct import orders.

Kylie Cohu of Jefferies asked for more detail on the Wizards segment's tariff exposure beyond Japan and for specifics on the bright spots in licensing and products that performed well around Easter.

Answer

CFO & COO Gina Goetter confirmed the Wizards segment's tariff exposure is minimal ($5-10M annually), with the bulk of manufacturing in the U.S. and some in Japan and Europe. CEO Chris Cocks added that D&D box sets are the primary import from China for the segment. He identified MY LITTLE PONY and MONOPOLY GO as licensing bright spots, and TRANSFORMERS, Beyblade, and Marvel as brands with strong POS performance.

Kylie Cohu asked management to rank-order the drivers of medium-term margin expansion. She also inquired about the primary sources of cost inflation and whether the company was lapping any significant deflation from the prior year.

Answer

CFO and COO Gina Goetter clarified that the largest contributor to margin accretion will be profitability improvements within the Consumer Products segment, driven by innovation mix and cost savings. She noted that inflation is modest at 2.5-3%, mainly in labor, and is being offset by productivity initiatives, with no material deflation being lapped from the previous year.

Kylie Cohu asked for more details on the innovation and partnership with Scopely for Monopoly Go!. She also inquired about the scale of the upcoming Marvel-themed MAGIC: THE GATHERING drop compared to the Lord of the Rings set and future plans for the collaboration.

Answer

CEO Chris Cocks praised Scopely as a best-in-class partner, highlighting their event strategy and direct-to-consumer initiatives as key innovations. He explained the initial Marvel Secret Lair drops are small, limited-run releases, but confirmed a full Spider-Man set is planned for the second half of 2025, with multiple Marvel sets planned over the next several years, positioning MAGIC for strong growth.