Mattel : Press Release

MATTEL REPORTS SECOND QUARTER

2023 FINANCIAL RESULTS

Second Quarter 2023 Highlights Versus Prior Year

• Net Sales of $1,087 million, down 12% as reported, or 13% in constant currency
• Gross Margin of 45.1%, an increase of 70 basis points; Adjusted Gross Margin of 44.9%, flat to the prior year
• Operating Income of $63 million, a decrease of $62 million; Adjusted Operating Income of $75 million, a decrease of $47 million
• Net Income of $27 million compared to prior year Net Income of $66 million
• Earnings per Share of $0.08 compared to prior year Earnings per Share of $0.18; Adjusted Earnings per Share of $0.10 compared to prior year Adjusted Earnings per Share of $0.18
• Adjusted EBITDA of $148 million, a decrease of $37 million
• Repurchased $16 million of shares, bringing first half total to $50 million
• Company reiterates 2023 guidance

EL SEGUNDO, Calif., Jul. 26, 2023 - Mattel, Inc. (NASDAQ: MAT) today reported second quarter 2023 financial results.

Ynon Kreiz, Chairman and CEO of Mattel, said: "Mattel's second quarter financial results were in-line with our expectations. We significantly increased free cash flow and continued to gain market share. Importantly, this moment will be remembered as a key milestone in our company's history with the release of the Barbie movie, our first ever major theatrical film."

Mr. Kreiz continued: "The Barbie movie is a showcase for the cultural resonance of our IP, our ability to attract and collaborate with top creative talent, and the capabilities of our franchise management organization. This also speaks to the potential of Mattel Films and the significant progress of our strategy to capture the full value of our IP."

Anthony DiSilvestro, CFO of Mattel, added: "While comparisons improved from the first quarter, our second quarter financial results were negatively impacted as retailers continued to manage inventory levels and by some overall industry softness. At this point, we believe the retail inventory correction is mostly behind us, and we look forward to meeting consumer demand for

our product, as we enter the second half of the year and all-important holiday season. Given our year-to-date performance and outlook for the balance of the year, we are reiterating our guidance."

Financial Overview

For the second quarter, Net Sales were down 12% as reported, or 13% in constant currency, versus the prior year's second quarter. Reported Operating Income was $63 million, a decrease of $62 million, and Adjusted Operating Income was $75 million, a decrease of $47 million. Reported Earnings Per Share were $0.08, compared to prior year Reported Earnings Per Share of $0.18, and Adjusted Earnings Per Share were $0.10, compared to prior year Adjusted Earnings Per Share of $0.18.

For the first six months of the year, Net Sales declined 16% as reported, and 17% in constant currency, versus the prior year's first six months. Reported Operating Loss was $52 million, a decline of $257 million, and Adjusted Operating Loss was $12 million, a decrease of $224 million. Reported Loss Per Share was $0.22, a decline of $0.46, and Adjusted Loss Per Share was $0.14, a decline of $0.40.

Net Sales in the North America segment decreased 18% as reported and in constant currency, versus the prior year's second quarter.

Gross Billings in the North America segment decreased 18% as reported and in constant currency, due to declines in Action Figures, Building Sets, Games, and Other (primarily Action Figures), Infant, Toddler, and Preschool (including Fisher-Price®), and Vehicles (including Hot Wheels®), partially offset by growth in Dolls.

Net Sales in the International segment decreased 3% as reported, or 5% in constant currency.

Gross Billings in the International segment decreased 1% as reported, or 3% in constant currency, due to declines in Action Figures, Building Sets, Games, and Other (primarily Action Figures), and Infant, Toddler, and Preschool (including Fisher-Price), partially offset by growth in Vehicles (including Hot Wheels) and Dolls.

Net Sales in the American Girl® segment decreased 16% as reported and in constant currency. Gross Billings in the American Girl segment decreased 15% as reported and in constant currency.

Reported Gross Margin increased to 45.1%, versus 44.4% in the prior year's second quarter, and Adjusted Gross Margin of 44.9% was flat versus the prior year. The increase in Reported Gross Margin was primarily driven by pricing, savings from the Optimizing for Growth program, foreign exchange favorability and lower severance and restructuring expenses, partially offset by cost inflation, unfavorable fixed cost absorption, inventory management efforts, including higher close-out sales and obsolescence, and mix and other factors.

Reported Other Selling and Administrative Expenses increased $3 million, to $337 million, primarily due to the gain on a sale of assets recognized in the second quarter of 2022, market- related pay increases, and higher severance and restructuring expenses, partially offset by cost management efforts and savings from the Optimizing for Growth program. Adjusted Other Selling and Administrative Expenses decreased $19 million, to $324 million, primarily driven by

cost management efforts and savings from the Optimizing for Growth program, partially offset by market-related pay increases.

For the six months ended June 30, 2023, Cash Flows Used for Operating Activities were $326 million, an improvement of $99 million, versus the prior year's first six months, primarily due to lower working capital usage, partially offset by changes in net earnings, excluding the impact of non-cash items. Cash Flows Used for Investing Activities were $62 million, an increase of $8 million, primarily due to lower proceeds from the sale of assets, partially offset by higher net proceeds from foreign currency forward contracts in the first half of 2023. Cash Flows Used for Financing Activities and Other were $74 million, as compared to cash inflows of $22 million in the prior year's first six months, primarily due to share repurchases and lower proceeds from the exercise of stock options.

Gross Billings by Categories

For the second quarter, worldwide Gross Billings for Dolls were $441 million, up 10% as reported, or 9% in constant currency, versus the prior year, primarily driven by Disney Princess and Disney Frozen, and Monster High, partially offset by a decline in Barbie.

Worldwide Gross Billings for Infant, Toddler, and Preschool were $197 million, down 28% as reported, or 29% in constant currency, primarily due to declines in Fisher-Price.

Worldwide Gross Billings for Vehicles were $364 million, up 11% as reported, or 10% in constant currency, primarily driven by growth in Hot Wheels.

Worldwide Gross Billings for Action Figures, Building Sets, Games, and Other were $226 million, down 39% as reported, or 40% in constant currency, primarily due to declines in Action Figures (primarily related to 2022 theatrical releases) and Other.

2023 Guidance

Mattel's full year 2023 guidance remains:

(in millions,

except EPS and percentages)

FY2023 Guidance

FY2022

Net Sales	Comparable	$5,435
(Constant Currency)
Adjusted Gross Margin	~ 47%	45.9%
Adjusted EPS	$1.10	- $1.20	$1.25
Adjusted EBITDA	$900	- $950	$968
Adjusted Tax Rate	25 - 26%	24%
Capital Expenditures	$175	- $200	$187
Free Cash Flow	> $400	$256

A reconciliation of Mattel's non-GAAP financial measures on a forward-looking basis, including Net Sales on a constant currency basis, Adjusted Gross Margin, Adjusted EBITDA, Adjusted EPS, and Adjusted Tax Rate is not available without unreasonable effort. Mattel is unable to predict with sufficient certainty items that would be excluded from the corresponding GAAP

measures, including the effect of foreign currency exchange rate fluctuations, unusual gains and losses or charges, and severance and restructuring charges, due to the unpredictable nature of such items, which may have a significant impact on Mattel's GAAP measures.

The company is operating in a challenging macro-economic environment with higher volatility, including inflation, that may impact consumer demand. Mattel's guidance takes into account what the company is aware of today but remains subject to further volatility and any unexpected disruption, including fluctuations in foreign exchange rates, inflation, changes in global economic conditions and consumer demand, labor market fluctuations, and other macroeconomic risks and uncertainties.

Conference Call and Live Webcast

At 5:00 p.m. (Eastern Standard Time) today, Mattel will host a conference call with investors and financial analysts to discuss its second quarter financial results. The conference call will be webcast on Mattel's Investor Relations website, https://investors.mattel.com. To listen to the live call, log on to the website at least 10 minutes early to register, download, and install any necessary audio software. An archive of the webcast will be available on Mattel's Investor Relations website for 12 months and may be accessed beginning approximately three hours after the completion of the live call.

Cautionary Note Regarding Forward-Looking Statements

Mattel cautions the reader that this press release contains a number of forward-looking statements, which are statements that relate to the future and are, by their nature, uncertain. Forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts and include statements regarding Mattel's guidance and goals for future periods and other future events. The use of words such as "anticipates," "expects," "intends," "plans," "projects," "look forward," "confident that," "believes," and "targeted," among others, generally identify forward-looking statements. These forward-looking statements are based on currently available operating, financial, economic, and other information and assumptions, and are subject to a number of significant risks and uncertainties. A variety of factors, many of which are beyond Mattel's control, could cause actual future results to differ materially from those projected in the forward-looking statements. Specific factors that might cause such a difference include, but are not limited to: (i) Mattel's ability to design, develop, produce, manufacture, source, ship, and distribute products on a timely and cost-effective basis;

1. sufficient interest in and demand for the products and entertainment Mattel offers by retail customers and consumers to profitably recover Mattel's costs; (iii) downturns in economic conditions affecting Mattel's markets which can negatively impact retail customers and consumers, and which can result in lower employment levels and lower consumer disposable income and spending, including lower spending on purchases of Mattel's products; (iv) other factors which can lower discretionary consumer spending, such as higher costs for fuel and food, drops in the value of homes or other consumer assets, and high levels of consumer debt;

1. potential difficulties or delays Mattel may experience in implementing cost savings and
   efficiency enhancing initiatives; (vi) other economic and public health conditions or regulatory changes in the markets in which Mattel and its customers and suppliers operate, which could create delays or increase Mattel's costs, such as higher commodity prices, labor costs or transportation costs, or outbreaks of disease; (vii) the effect of inflation on Mattel's business, including cost inflation in supply chain inputs and increased labor costs, as well as pricing actions taken in an effort to mitigate the effects of inflation; (viii) currency fluctuations, including

movements in foreign exchange rates, which can lower Mattel's net revenues and earnings, and significantly impact Mattel's costs; (ix) the concentration of Mattel's customers, potentially increasing the negative impact to Mattel of difficulties experienced by any of Mattel's customers, such as bankruptcies or liquidations or a general lack of success, or changes in their purchasing or selling patterns; (x) the inventory policies of Mattel's retail customers, as well as the concentration of Mattel's revenues in the second half of the year, which coupled with reliance by retailers on quick response inventory management techniques, increases the risk of underproduction, overproduction , and shipping delays; (xi) legal, reputational, and financial risks related to security breaches or cyberattacks; (xii) work disruptions, including as a result of supply chain disruption such as plant or port closures, which may impact Mattel's ability to manufacture or deliver product in a timely and cost-effective manner; (xiii) the impact of competition on revenues, margins, and other aspects of Mattel's business, including the ability to offer products that consumers choose to buy instead of competitive products, the ability to secure, maintain, and renew popular licenses from licensors of entertainment properties, and the ability to attract and retain talented employees and adapt to evolving workplace models;

1. the risk of product recalls or product liability suits and costs associated with product safety regulations; (xv) changes in laws or regulations in the United States and/or in other major markets, such as China, in which Mattel operates, including, without limitation, with respect to taxes, tariffs, trade policies, or product safety, which may increase Mattel's product costs and other costs of doing business, and reduce Mattel's earnings and liquidity; (xvi) business disruptions or other unforeseen impacts due to economic instability, political instability, civil unrest, armed hostilities (including the impact of the war in Ukraine), natural and manmade disasters, pandemics or other public health crises, such as the COVID-19 pandemic, or other catastrophic events; (xvii) failure to realize the planned benefits from any investments or acquisitions made by Mattel; (xviii) the impact of other market conditions or third party actions or approvals, including those that result in any significant failure, inadequacy, or interruption from vendors or outsourcers, which could reduce demand for Mattel's products, delay or increase the cost of implementation of Mattel's programs, or alter Mattel's actions and reduce actual results; (xix) changes in financing markets or the inability of Mattel to obtain financing on attractive terms; (xx) the impact of litigation, arbitration, or regulatory decisions or settlement actions; (xxi) Mattel's ability to navigate regulatory frameworks in connection with new areas of investment, product development, or other business activities, such as non-fungible tokens and cryptocurrency; and (xxii) other risks and uncertainties as may be described in Mattel's filings with the Securities and Exchange Commission, including the "Risk Factors" section of Mattel's Annual Report on Form 10-K for the fiscal year ended December 31, 2022 and subsequent periodic filings, as well as in Mattel's other public statements. Mattel does not update forward- looking statements and expressly disclaims any obligation to do so, except as required by law.

Presentation Information / Non-GAAP Financial Measures

The financial results included herein represent the most current information available to management and are preliminary until Mattel's Form 10-Q is filed with the SEC. Actual results may differ from these preliminary results.

To supplement our financial results presented in accordance with generally accepted accounting principles in the United States ("GAAP"), Mattel presents certain non-GAAP financial measures within the meaning of Regulation G promulgated by the Securities and Exchange Commission. The non-GAAP financial measures that Mattel uses in this earnings release includes Adjusted Gross Profit, Adjusted Gross Margin, Adjusted Other Selling and Administrative Expenses, Adjusted Operating Income (Loss), Adjusted Operating Income (Loss) Margin, Adjusted Earnings Per Share, earnings before interest expense, taxes, depreciation and amortization ("EBITDA"), Adjusted EBITDA, Free Cash Flow, Free Cash Flow Conversion (Free