Mattel Outlines Strategic Plans for Growth

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Mattel CEO Margo Georgiadis and members of the management team have revealed the company’s new growth strategy and medium-term financial outlook.

Mattel unveiled a future-proofed long-term strategic framework that comprises a five-pillar plan. The company’s goals are to build its “power brands” (American Girl, Barbie, Fisher-Price, Hot Wheels and Thomas & Friends) into connected 360-degree play systems and experiences; accelerate emerging markets growth with digital-first solutions; focus and strengthen its innovation pipeline; reshape operations to enable the strategy of being leaner, faster and smarter; and reigniting Mattel’s culture and team.

To drive growth and margin improvement, Mattel will be making incremental investments. The company expects that the cumulative incremental investment to execute this strategy in both capital expenditures and operating expenditures will be between $250 and $350 million. Mattel will right-size its dividend to free up resources for reinvestment as well as strengthen its balance sheet and provide added financial and strategic flexibility.

As for the company’s medium-term financial outlook, Mattel believes its future-state business model can achieve mid-to-high single-digit revenue growth and operating profits that are at, or above, 15 percent.

Georgiadis commented: “Our vision is to inspire the wonder of childhood as the global leader in learning and development through play. As we shift our business aggressively in a new strategic direction and transform how we operate, I believe we have the assets to achieve this vision and shape the future of the toy industry. The strength of the underlying Mattel franchise supported by important trends such as a growing global toy market and an increasingly digital, mobile-first world provides an opportunity for Mattel to create significant long-term value for our investors.”