Both MAT's revenue and adjusted EBITDA for the second quarter of this year were higher than anticipated, mostly as a result of stronger-than-anticipated top-line growth across all key brands and higher adj EBITDA margins. Adjusted EBITDA was $148 million (almost twice the consensus forecast), adjusted EPS was $0.10, and revenue came in at $1.08 billion.
The fact that stockpiles are improving and regular shipping schedules should return to normal in 2H23 should be addressed first. Retail inventory levels, which were very high at the start of 2023, improved even more in the second quarter of that year, according to MAT, who mentioned this on the call. Inventory levels in terms of dollars fell by double digits % from 2Q22 levels, while weeks of supply fell by high single digits when compared to the same time last year.
The management's assertion that the correction of retail inventory is almost complete was the most important comment made on the call. I foresee a return to more regular shipping patterns in the upcoming quarters. Since demand for MAT's products is extremely seasonal and peaks in the second part of the year, it is essential to reset inventory and get ready for this busy time. I anticipate fairly significant growth in the upcoming quarters due to the inventory level reset and the fact that it compares to an easy 2H22 as well.
It's critical, in my opinion, to analyse how the recent success of the Barbie movie has impacted the sales of MAT's dolls. In 2Q23, Barbie's gross billings decreased by 7% while her point of sale (POS) declined by double digits. I believe that 2Q23 data did not yet accurately represent the influence of the Barbie movie because promotions were moved into 2Q to coincide with the Barbie movie's July release, which had an impact on both POS and shipping for Barbie. Barbie's POS sales changed from being down by the low double digits in 2Q23 to being up by more than 10 points in July, according to management, giving an early indication of the extent of the Barbie impact.
Nevertheless, I don't believe the new Barbie movie's economics are secure enough yet for thoughtful analysis. In spite of the fact that the opening weekend of the Barbie movie was a record-breaking and box office success, there was no mention of any prospective advantages from shared movie economics from MAT. Upper management will likely be banging the table in jubilation over this accomplishment, in my opinion. Either there is a problem or they are simply being cautious. Until the third-quarter results call, we won't be certain.
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