Mattel 1Q15 Earnings Call Notes

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New management working on turnaround

“I have been deeply engaged inside the company and with the board and our management developing a comprehensive plan for a rapid turnaround of Mattel. Now, simply put, our focus is to move quickly to put the company back on track for growth and improve profitability”

We have execution problems and need to sharpen some of our strategic priorities

“ our challenges are grounded primarily in execution, but it also pointed out the need to sharpen and expand some of our strategic priorities. And frankly, as the industry continues to grow, there is no reason in my judgment with our incredible portfolio of brands in our superior scale why we can’t be leading with that growth.”

The nature of play has changed

“the nature of play has changed in many ways. The isolated brand perspective that Mattel long adhered to is less relevant. And a new and exciting role to play has emerged, a role to play which encourages and rewards partner brands with greater scope, world class content and faster innovation.”

Mattel really has two complementary businesses

“at its very foundation, Mattel has really two complementary businesses, but together leverage the global scale of our extraordinary design expertise and our unmatched global supply chain and sales capabilities.”

Get back to brand building

“with a rapid review of our culture, Mattel is getting back to embracing brand building, creativity and innovation. And we will put a premium on speed and personal accountability. And we are also changing things by organizing around the following six strategic priorities.”

Seems to be excited about the global supply chain

“Leadership in our global supply chain is clearly critical to achieving our objectives and so too is our commercial organization. Here we are emphasizing expanded relationships with our brick-and-mortar and omni-channel customers to deliver more engaging retail experiences, new merchandising concepts, continuous brand support throughout the year, and targeted price value propositions to be more competitive.”

Leverage a lot more outside expertise

“the company has also begun to leverage a lot more outside expertise to help us drive change. We need to approach our business differently and new strategic partnerships, many of which will be outside of our usual boundaries will be a significant focus for us in 2015 and beyond. These partnerships will enable us to adopt new technologies to accelerate product innovation, support new content creation, expand retail distribution, including e-commerce and to grow our licensed entertainment offerings.”

Partners with Google, ToyTalk

“We have already seen some of our early success of Toy Fair with our partnership with ToyTalk and our ongoing collaboration with Google and many more are underway. We are also leveraging our relationships with traditional media partners to extend the existing brands and to launch new ones. And we are deepening our engagement with companies like YouTube and Netflix to develop even more content and distribution platforms. We are also in active discussions with a number of media and studio companies to work with us around content development.”

Still have a lot of work to do

“we still have challenges and lots of work to do. And I am confident that with the revitalized management team we can quickly capitalize on growth opportunities and perform better for all of our constituents.”

Partnering in 3D printing

“we are pleased to announce an exclusive partnership with Autodesk, the world leader in 3D design software. 3D printing is quickly moving from the exotic to the everyday, thanks to the growth of the Maker movement and consumer accessible print outlets. That’s why we are focusing strategically on the design and software side to drive future leadership and growth. We want Mattel to be at the forefront as the 3D printing becomes an important component of the toy industry. And through this partnership, Mattel’s 3D printing apps activated by Autodesk will soon deepen brand experiences for kids, parents and collectors alike by offering them the opportunity to customize their favorite toys.”

Partnership with Quirky

“ Today, we are announcing an exclusive new partnership with Quirky, perhaps one of the best known and most unique invention companies in the world. Their unique approach effectively brings real-time relevant invention through a broad and growing community of influences and inventors exponentially increasing our well of ideas and supercharging our existing capabilities to grow brand and toy innovation faster.”

Best in class technology partnerships

“Collaborations with additional best-in-class technology partners are an ongoing priority in our strategic plan putting us back in the forefront of category innovation and creating additional value for our IP.”

Monster high transitioning from growth to core brand

“We continue to manage Monster High transitioning if you will from growth property into what we are defining as an evergreen core brand. Based on everything that we see from research to consistent feedback from consumers and retailer response Monster High is absolutely a strong viable property.”