Mattel highlights from earnings presentation slides
- Expect to deliver at high end of $250-300 million in two-year gross cost savings by the end of 2016
- Gross Margin FY16 Outlook:
- Headwinds: Unfavorable foreign exchange, Changes in mix, but expected to moderate in Q4, Labor inflation
- Tailwinds: Funding Our Future cost savings, Incremental cost savings program, Favorable commodity trends
- Targeting around 48.5%; FX & mix headwinds should moderate in Q4
- Adjusted SG&A FY16 Outlook:
- Target $55-65MM savings vs. 2015 adjusted SG&A baseline of $1.465B
- Reflects goal to absorb the overhead from the Fuhu & Sproutling acquisitions (not in original target)
- FY16 Financial Outlook:
- Sales Growth: Goal is to hold net sales relatively flat in constant currency, Currency is estimated to have a 2-4% negative impact to net sales on a reported basis [Long-term objective low-to-mid single digits)
- Gross Margin: See Above [Long-term objective ~50%)
- Advertising: ~12% [Long-term objective 11-13%]
- SG&A : See Above [Long-term objective 22-23%]
- Operating Margin: Long-term objective 15-20%
- Currency is estimated to negatively impact EPS at the low-end of the $0.30 to $0.40 range (including Brexit)