Mattel, Inc. (MAT) Earnings Call Transcript & Summary

Hello, and welcome to Mattel's 2024 investor presentation. This is an exciting time for our company. We are proud to share with you the progress we made in 2023 and the evolution of our strategic road map to grow Mattel's IP-driven toy business and expand our entertainment offering. Joining me are key leaders of our world-class management team. Lisa McKnight, our Chief Brand Officer; Josh Silverman, Mattel's Chief Franchise Officer; Robbie Brenner, President of Mattel Films; Steve Totzke, Mattel's President and Chief Commercial Officer; and Anthony DiSilvestro, our Chief Financial Officer. Let's begin with 2023 and which was a milestone year for Mattel. We extended our leadership position in our key toy categories and gained significant share overall and further strengthen our financial position. And of course, there was the extraordinary success of the Barbie movie. The Barbie movie was a cultural phenomenon, achieving the largest global box office in 2023, becoming Warner Bros. highest box office movie in the 100-year history and the industry's 14th highest grossing movie of all time. Most importantly, the Barbie movie was a showcase for the cultural resonance of our brands, the value we can capture by unlocking our IP portfolio and the potential for Mattel films. During the year, we generated more than $700 million in free cash flow, resumed share repurchases for the first time since 2014, and ended the year with over $1.25 billion of cash on hand. We achieved an investment-grade rating and have the strongest balance sheet we have had in years. Per Circana, for the full year, Mattel gained 70 basis points of share globally in the toy category, was the #2 global toy company and the #1 toy company in the U.S. for the 30th consecutive year, achieving its largest annual share gain in the U.S. on record. In fact, this was our highest full year POS in 10 years. As we look to 2024, we believe we are very well positioned competitively and expect to continue outpacing the industry and gain market share. The global toy industry declined 7% in 2023 per Circana following extraordinary growth of 25% from 2019 to 2022, reaching an all-time high. The industry in 2023 was 17% higher than 2019 prepandemic and the third largest ever. We expect the toy industry to decline in 2024, although at a lesser rate than 2023. The anticipated decline is due to a line of toyatic theatrical film slate and the impact of a shift in consumer spending patterns towards experiences and services which we expect will moderate over the year. Beyond 2024, we believe trends will further improve and that the industry will return to growth and continue to grow over the long term. The industry fundamentals are strong. Toys are an important part of consumers' lives and retailers see the category as a strategic lever. Looking at the entertainment landscape, following the strikes, we are seeing more movies headed to the theaters, which is a positive for the industry, and Mattel brands are more in demand at a time when everyone is looking for big franchises and non-IP with a built-in fan base. Our company's mission and purpose guided us very well in executing our strategy over the last few years. As we continue our journey, we have successfully broadened our reach outside of toys into new entertainment verticals and expanded to new demographics. Perhaps the most important change in our approach is to think of people who buy our products as more than just consumers, they are fans that have a deep emotional connection to our brands. And when you have a lot of fans, it becomes an audience. And once you realize you are speaking to an audience, it's a very different conversation and the world of opportunity opens up. Mattel is now a leading global toy and family entertainment company, and we are evolving our purpose and mission to speak to that. Starting this year, Mattel's purpose is to empower generations to explore the wonder of childhood and reach the full potential. And our mission is to create innovative products and experiences that inspire fans, entertain audiences and develop children through play. This change better reflects the Mattel of today and where we are heading. At its core, Mattel is a creative company driven by innovation. Our iconic brand portfolio, including some of the most beloved franchises in the world is our key asset. We engage fans through our franchise brands as well as other popular properties that we own or license in partnership with global entertainment companies. We transformed Mattel from a toy manufacturer that was making items to an IP company that is managing franchises. To be clear, toys are foundational to our strategy. It is where we create the initial emotional connection with consumers that enables us to expand fan engagement into new entertainment verticals and capture more value for Mattel. Building off our success to date, we continue to evolve our strategy and now look to grow our toy business profitably and capture full value of our IP outside the toy aisle. Here are the key priorities that will help us do that. Scaling our toy offering through consumer-centric innovation in creating insight-driven products and experiences is a main stay of our strategy. We will scale our portfolio in the following ways: expand our leader categories, dolls, vehicles and Infant-Toddler-Preschool; and our power brands: Barbie, Hot Wheels and Fisher-Price, which have even more room to grow. Growth challenging categories where Mattel is not a global leader yet such as action figures, games and building sets, but we can innovate and compete, revitalize and relaunch catalog IP which we have done successfully with Monster High, Masters of the Universe and Polly Pocket and are preparing to do with Barney this year and more on the way. Develop new brands and play patterns like in Enchantimals, Color Reveal, Hot Wheels or [ See 'N Skate ] as well as Pictionary versus AI, the first board game to integrate AI into gameplay. Add and expand partner IP, as we continue to strengthen our relationships with the major entertainment companies and IP owners such as Universal, Disney and Warner Bros and win new licenses and enter new white space opportunities, such as the growing adult collective market and an important new segment for Fisher-Price by leveraging our global scale and resources. Lisa McKnight will talk more about this and how we apply our evolved Mattel Playbook to scale our portfolio as well as highlight some of our 2024 key product innovations. Optimizing operations is about continuously looking to strengthen our core capabilities from ideation and design to engineering and manufacturing, all the way to putting the right product, at the right price, on the right shelf, at the right time all over the world. We have made significant improvements to our operations over the past few years, such as enhancing our product development processes by driving earlier alignment between product design, consumer-led insights and commercial execution, driving productivity and operational efficiency in our supply chain as well as outsourcing manufacturing as part of our capital-light strategy, exiting underperforming product lines and segments and improving service levels for our retail partners. We also recently made several organizational changes, including in category management, most notably at Fisher-Price and American Girl as well as in design and development, integrated marketing and global supply chain to further leverage and enhance our capabilities and skill sets. With this optimization mindset, we have already achieved over $1.3 billion of cost savings since 2018, and we are not stopping there. We recently announced a new 3-year program called optimizing for profitable growth that targets an additional $200 million in savings between 2024 and 2026. Anthony DiSilvestro will talk about this new program and provide more detail on our financial outlook and capital deployment priorities. Evolving demand creation is a competitive advantage for Mattel, and we have elevated this to a strategic priority. In an ever-changing media landscape with virtually unlimited supply of content and ubiquitous distribution where consumers spend more and more time online, brands have to work harder than ever for share of mine. At Mattel, we have built robust in-house teams capabilities and our own tools to reach kids and family shoppers across platforms. We are also leveraging our retail network of approximately 500,000 stores where our product is sold to do that. Connecting our brands with pop culture and societal trends to amplify fan engagement and broaden appeal is key to our success. Adopting our approach and continuously updating our methodology to find consumers wherever they are, is no less important. This was demonstrated with the successful launch of the Barbie movie as we partnered with Warner Bros. to amplify our demand creation expertise to turn a theatrical release into a cultural phenomenon. For that, we received industry awards, including the leading marketer of the Year by Ad Age. Mattel Creations, our growing D2C business serving adult collectors is another showcase where we bring together consumers, commerce, community, content and culture to create demand in an important growth area for Mattel. Steve Totzke will talk about the evolution of Materials demand creation capabilities and the execution behind our collector D2C destination. Mattel owns many distinct brands that have a rich heritage and high awareness. These are well-known iconic brands with passionate built-in fan bases, many of which have generated hundreds of millions of dollars of revenue over the years and others that have the potential to do so. These franchise brands have multiple consumer touch points and the potential to drive meaningful business, both in and outside of the toy aisle. They include Barbie, Hot Wheels and Fisher-Price, our power brands; as well as American Girl, Barney, Enchantimals, Imaginext, Little People, Magic 8 Ball, Masters of the Universe, Matchbox, Mega, Monster High, Pictionary, Polly Pocket, Thomas & Friends and UNO, among others. The more franchise brands we own and the more they grow, the more that we can strengthen, diversify and scale our toy portfolio. Our franchise brands start their journey as toys and not the bridge to our entertainment strategy. They set us apart and enable us to create significant value in both toys and entertainment. We will talk more about how we are extending our toy brands to maximize the reach and impact across multiple consumer touch points. Beyond toys, we have significant upside in capturing the full value of our iconic brand portfolio in highly accretive business verticals. The Barbie movie is the most obvious showcase, but it is not the only one. We have been making significant progress across several verticals and are now looking to accelerate our offering. Mattel Films' vision is to collaborate with leading filmmakers to make standout quality movies based on our iconic brands that will resonate in culture and appeal to global audiences. Mattel Television Studios develops and distributes episodic and long-form content to expand Mattel characters and stories across linear and streaming platforms worldwide. Consumer products complement our toy business through best-in-class product offering and exciting brand partnerships across all shopper categories and retail platforms. Mattel digital games extend physical play to the virtual world by creating digital games and experiences that drive sustained engagement for fans of all ages, live events and experiences bring our brands to life through immersive environments where fans can share experiences and create lasting memories, and Publishing, which turns our brands into stories in print format to inspire, educate and entertain readers of all ages. With our strong financial position, we'll now consider strategic investments to support our entertainment strategy and drive organic growth, consistent with our capital allocation priorities. You will hear more about our entertainment strategy from Josh Silverman, who will talk about these highly accretive business drivers and from Robbie Brenner, who will share more about the progress across our film slate. Up next is Lisa McKnight, Mattel's Chief Brand Officer. Lisa has an incredible track record of success over her 25 years with the company. She was a chief architect of the revitalization and ongoing success of Barbie, Head of the brand since 2016 and adults category since 2019. She was also instrumental in evolving Mattel's Playbook. Lisa assumed her role in 2023 and hit the ground running. She will talk about our Playbook and exciting brand portfolio. I will now turn the stage over to Lisa.

Thanks, Ynon, and hello, everyone. It is great to be here and speak on behalf of such an incredible team of world-class creators, designers, engineers, marketers and brand strategists. I'm also very proud to represent a portfolio of toys and brands that matter and are resonating in culture. Play is our language, and we use it to connect with our fans, children and families every day. As Ynon said, at Mattel, our products and experiences are designed to inspire fans, entertain audiences and develop children through play. And in 2023, Mattel toys continued to be in demand and grow market share. Per Circana globally, we grew share in our 3 leader categories: Dolls, Vehicles and Infant-Toddler-Preschool as well as in building sets. Barbie and Hot Wheels were the #2 and #5 top toy properties for the year. Hot Wheels was the #1 toy. UNO was again the #1 card game and the #1 traditional game. And Monster High was the #1 doll's growth property. Inspired by our mission and purpose and guided by our strategic road map and the Mattel Playbook, we have a tremendous opportunity to build upon. Mattel's Playbook has been a game-changing approach to brand management and integral to our recent success. And as we evolve into a new era, our Playbook is evolving, too. While you'll recognize a few similarities to the previous playbook, we think this evolution is revolutionary for its potential. With that, I'd like to walk you through the evolution of our brand, Playbook. Take a look at the [indiscernible]. Brand purpose is about amplifying the distinctive reason for being in each of our brands with intent and authenticity. Through purposeful play, we harness the impact of our brands to promote and influence behavior to create a better world. We also know this is becoming increasingly important to consumers, retailers, partners and other stakeholders who share these values. Here are some examples. Barbie's Brand Purpose to inspire the limitless potential in every girl, resonates beyond childhood. Monster High celebrates individuality and the acceptance of differences, an inclusive message that's increasingly more relevant. Hot Wheels ignites and nurtures the challenger spirit. Fisher-Price helps children have the best possible start in life. And UNO fosters togetherness through the universal language of play. Consumer-centric innovation is about creating insight-driven products and experiences designed to capture the hearts and minds of fans globally. We've evolved from design-led to consumer-centric to reflect the importance of embedding retail and consumer insights throughout every stage of our innovation, from design and development to packaging and point of sale. We put the consumer first by proactively seeking inputs from the marketplace, retailers and shoppers even earlier in the process. This increases the likelihood of meeting and exceeding consumer expectations. Cultural relevance is about connecting with pop culture and societal trends to amplify fan engagement and broaden appeal. This is why our brands mean so much to our fans. We aim to ensure that our timeless brands are also timely by staying in lockstep with culture. There's no better example of this than a theater filled with fans and head-to-toe Barbiecore, a trend that was so pervasive, we saw lesions of apparel companies and retailers drafting off the sudden popularity of color pink. Franchise mindset is about maximizing reach and impact for our brands across multiple entertainment verticals and consumer touch points. This holistic approach broadens our audience by giving them more ways to engage with the brands they love. It provides a bridge between toys and our entertainment verticals and allows us to expand the fan and audience relationships in both. We are very excited about this evolved playbook, which focuses and guides us and we believe is a competitive advantage. So let's talk toys. We operate our toy business through a category management structure, which enables us to leverage Mattel's expertise, infrastructure, resources and scale. We are a global leader in dolls, vehicles and infant-toddler-preschool and a challenger in action figures, games and building sets. 2023 was the year of dolls for Mattel. Our dolls portfolio gained 760 basis points of global market share per Circana. Our dolls portfolio was $2.4 billion in gross billings, up 15% from 2022. And when we talk about our success in dolls, there's no better place to start than with Barbie. Barbie is so much more than a doll. She's a pop culture icon with societal impact. Barbie gross billings grew more than $0.5 billion since 2017. The Pink title wave swept across the globe, leading the cultural conversation and energizing and expanding the Barbie fan base. In 2024, we will introduce new play patterns, a new segment, new content and exciting promotions. Welcome to Mini Barbie land. Minis are taking the world by storm. It's a $1.6 billion global market per Circana. But while the product is mini, we believe the size of the opportunity is enormous, and we want in. Mini Barbie land is a great example of our consumer-centric approach to design. We were inspired by our research, which showed that kids love all things mini and that they aspire to collect and play with Barbie's entire world. Mini Barbie land will replicate Barbie's World at 1.5-inch scale, perfect for collecting as well as on-the-go play. Take a look. [Presentation]

For older girls, we're going new fashion doll segment called Barbie Dream Besties. The Dream Besties are aspirational BFFs. Barbie Malibu and Barbie Brooklyn as well as Teresa and Renee, who older girls know from Barbie content. We're also thrilled to bring horses back to the Barbie line this year, a proven play theme with girls. We will offer an immersive play experience that includes dolls, a stable and an interactive horse that is realistic movements and sounds. This year, we are celebrating Barbie's 65th anniversary and nobody celebrates anniversaries better than Mattel. This will be a big party and a year full of exciting activations, including honoring a host of women role models, all around the world from Viola Davis to Kylie Minogue, launching new content platforms, such as an all-new podcast and tapping into Barbie's fashion heritage with design collaborations that only Barbie can do. And don't worry, we haven't forgotten about Ken. We will look to surprise and delight fans with a new Ken-bassador program, recognizing male role models who are more Kenough. More to come on that. American Girl is a brand like no other, with loyal fans and a trusted partner in building girls of strong character through engaging stories and immersive play experiences. As Mattel's premium doll line, we see exciting opportunities to leverage our scale and optimize operations to drive profitable growth. We've made changes that will improve performance and recently announced that American Girl will become part of our North America commercial organization. This will combine the brand with our proven expertise in demand creation and will better align our overall D2C strategy. We will also be consolidating the American Girl campus into El Segundo to benefit from the market-leading capabilities of our world-class dolls design team. Guided by the Mattel playbook, we will connect to American Girl with pop culture and societal trends to amplify fan engagement and broaden its appeal. For example, last year, even American Girl joined the fun with Barbie with our first-ever American Girl Loves Barbie Doll. The presale event sold out on Mattel Creations in 25 hours, and we're excited to build on this collection later this year. And we recently announced that we're developing an American Girl feature film in partnership with Paramount Pictures. We also have a lot in store with our omnichannel approach through our proprietary online channel and experiential retail locations, anchored by flagship stores in New York, Chicago and Los Angeles. The retail stores or destinations where families can engage with the brand in a variety of ways and create unforgettable memories and, of course, buy our products. Last year, we relocated and opened our L.A. flagship store. And this year, we're opening a premium boutique in Dallas. Check out this amazing Florida Ceiling dollhouse. Of course, American Girl is all about exceptional product. To align with fourth quarter seasonality, when American Girl does approximately 50% of its business, we shifted our Girl of the Year launch to October, allowing us to jump start the holiday season. Historically, we missed this opportunity by announcing the Girl of the Year in January, not anymore. Lila Monetti, the Girl of the Year in 2024 who loves horses and Gymnastics was a success and sold out this past holiday. Our 2025 Girl of the Year doll will launch even earlier this year in September to take full advantage of this year's holiday season. And while I can't reveal her yet, it will be a very popular play theme. We also announced the expansion of our successful collaboration for American Girl with Disney Princess and Disney Frozen by introducing new [ mainland ] dolls to complement the successful premium collection launched last year. American Girl is a treasured brand with multigenerational fans and we're confident about its future and profitable growth going forward. Moving on to Disney Princess. Last year, we successfully launched our line of Disney princess and Disney Frozen product and are rolling it out globally. Consumers quickly realized the level of detail and quality in the Mattel relaunched fashion doll and small doll lines. Disney Princess became the #2 global growth doll property led by Mattel's line per Circana. We're expanding the line this year with innovations, including a Spin and Reveal Storytelling Fashion Doll, a Frozen Reveal Small Doll and affordably priced multi-princess playsets. Here's an example of our new Disney Princess Frozen Ice Reveal product. [Presentation]

Recently, Disney announced Moana 2 will voyage into theaters in November of 2024. We're excited to build on the successful line that we created for Moana and we'll celebrate new characters and products that will support this beloved franchise. We're also excited to hear that Disney will head back into the unknown with the anticipated release of Frozen 3 sometime in the next 2 years. And finally, Mattel is developing a new line of dolls for one of Disney's older girl properties supported by the Disney Channel. So there is a lot to look forward to with Disney and our doll line. Another exciting partnership this coming holiday season will be with Universal for the much anticipated cinematic event, the feature film adaptation of the award-winning, record-shattering broadway musical, Wicked. You may have seen the spectacular teaser during the Super Bowl. Worth noting, the Wicked story will benefit from 2 theatrical releases over the next 2 years, and we will be supporting it with beautifully detailed dolls for fans of all ages. Monster High enters 2024 on a Well, Monster High, its second year of global growth. This year, we will be building out the world with a high school play set with innovative features, including trapped doors and other hidden surprises. We will introduce new scales and form factors as well as great new fashions with our Monster Ball line, reinforcing the strength of our most popular goals. Check it out. [Presentation]

In addition, we're broadening our adult collector line, which consistently sells out on Mattel Creations. This premium series is renowned for its unique collaborations and clever monsterfications of pop culture characters. Monster High will launch its first entertainment matchup with Wednesday, the hit show on Netflix. While we can't show any product yet, the line will be released on both Mattel Creations and at mass retailers this fall. Shifting gears to vehicles. Our vehicles portfolio has grown for the last 5 years and just achieved another record year of gross billings, reaching $1.6 billion in 2023. The horsepower driving success in this category is Hot Wheels, delivering its sixth consecutive record year in 2023. This year, we're growing our adult space through the expansion of our collector series, both at mass retail and Mattel Creations. We're broadening our channel distribution of die cast models in EMEA and Asia. We're accelerating growth in adjacent vehicle categories such as RC and Skate, where we're continuing our partnership with Tony Hawk. Check out our spring 2024 Hotwheels skate offerings and key driver, the Hot Wheels Tony Hawk Serial [ Skateball ]. [Presentation]

We also love the Mega Rex Alive RC planned for fall. It delivers a dramatic light show and interactive sounds. We will build on the successful 2023 launch of Race Reverse, our new character franchise that brings entertainment brands to the world of Hot Wheels. And our core product line will benefit from integration in the upcoming Hot Wheels Let's Race animated series which Josh will discuss shortly. As we look to fall 2024, we will reveal several new drivers, including the Hot Wheels Ultra Shark carwash, which brings together kids' favorites, Car Wash, Sharks and the Transforming Magic of Color Reveal. While Hot Wheels is about racing and fantasy, Matchbox is about realism and are aimed to create products that are more sustainable. We launched our first mass-produced die cast assortment that uses recycled metal and features plastic-free packaging. We will continue to innovate our playsets with themes around land, sea and air, anchored by our new playset, Matchbox Transportation Hub. Take a look. [Presentation]

And we will partner with automobile manufacturers around the world as we look to amplify realism within the brand. Disney Picks Our Cars is another important brand in our vehicles portfolio, and we couldn't be happier with our decades-long partnership. In 2024, we're bringing more toy innovations with new storytelling developed with Disney. The Global Racers Cup will have Lightning McQueen post a racing invitational with racers from around the world. Next, let's talk Infant, Toddler and Preschool. The Infant-Toddler-Preschool category is the third largest in the industry per Circana. Mattel outperformed the category in 2023 and extended its leadership position. Fisher-Price continued to be the #1 property in the category and was also the #6 overall global toy property in Q4 and #7 for the full year in 2023. Our Infant-Toddler-Preschool business achieved $1 billion in gross billings in 2023 and is anchored by Fisher-Price. Our portfolio is comprised of several segments that span the critically important first 5 years of childhood and is divided between Infant and Toddler and Preschool. Infant and Toddler includes Fisher-Price branded products, such as Laugh & Learn, Link Squad and Little People as well as Power Wheels and Baby Gear. This is a product-driven segment, which addresses the prenatal and 0- to 3-year old market and speaks to parents. Preschool includes toys and play systems based on owned IP, such as Thomas & Friends, Barney and Bob the Builder as well as partner entertainment brands. It also includes Imaginext, our own form factor for action figures, specifically designed for young children. This segment is brand and character driven and speaks to kids aged 2 to 5. In terms of financial profile, the infant and toddler segment is divided into 2 areas. The first is Fisher-Price Core, which has been consistently generating around $700 million of gross billing annually over the past 6 years. This has been a stable business, albeit at low margin. The second is Power Wheels, our ride-on business and Baby Gear, which includes entertainers, jumpers and [ suits ]. These 2 businesses have been declining over the past 6 years from around $275 million in gross billings to around $125 million and is very low margin. Much of the decline in Power Wheels is a result of low price competition and in Baby Gear is due to our decision to proactively exit certain product lines. Preschool is a more cyclical business that has declined over the past 6 years from more than $400 million in gross billings to about $200 million. The decline is primarily due to fewer toyatic entertainment licenses and weakness in Thomas & Friends as well as last year's lighter film slate, which impacted the Imaginext line. We recently decided to concentrate our infant, toddler and preschool strategy in Fisher-Price Core and preschool as we prioritize profitability and position us for longer-term profitable growth. We will strategically out-license or exit Power Wheels and continue to exit additional lines of baby gear, which are lower margin and do not align with our IP-driven toy strategy. Now let's cover product highlights within each of the key segments where we will operate going forward. Fisher-Price is celebrating its 94th anniversary this year with its roots in child development and nearly a century of experience and an on-site PlayLab where we study newborns and toddlers on a daily basis, Fisher-Price Core is uniquely positioned to lead this category. Our newborn line is a great example of these capabilities. We consistently lead in baby play mats and gyms. This year, we're updating our kick-and-play Piano, which continues to be the #1 gym globally and #1 item within the infant and toddler segment per Circana. We've evolved the design toward a softer aesthetic tied to popular home decor that we know millennial parents love, yet we retained the features and sounds that are universally popular. We even got John Legend's attention last year when he covered our classic, Purple Monkey song. [Presentation]

The newborn line has also benefited from multiple cultural moments, initially designed for newborns. We were pleasantly surprised to find a new audience drawn to our soothing toys. Our Soothe 'n Snuggle Otter is the #1 infant plush item globally per Circana. To date, it has sold nearly 2.2 million units and found its way into the arms of stressed out Gen Ziers. It's even a great companion for puppies. And we're dialing up the cute factor this year with a new adorable Soothe & Settle Bunny. From toys that support the growth and development of little people, let's talk about the Little People brand itself. Last year, the Little People farm with smart stages was the #7 item in all of infantile to preschool in the U.S. per Circana. We're building out this world with tractors, more characters and lots of animals. We've also made a positive societal impact in our Little People line by introducing characters that are more representative of the broad spectrum of ethnicities and identities around the world. As a brand, we are playing into pop culture like never before by driving buzz around programs, such as our Little People Collector Range, which celebrates existing fandoms across multiple genres, including our recent Super Bowl set. Little People will also take on unexpected franchises such as Breaking Bad, Squid games and Cobra Kai. This [ Squirtle ] opportunity taps into the nostalgic trend, which is real and growing. Take a look. [Presentation]

Little People is a strong example of the Mattel brand playbook in action. We're excited to share that Fisher-Price is entering a new segment, Wood. This is an $800 million market within the infant, toddler and preschool category per Circana. This is a white space opportunity for us. And with our child development roots, an area where we believe we can play and win. Fisher-Price Wood stands out for its on-trend design and accessible price point. Fisher-Price Wood will tap into key developmental play patterns. This, by the way, is a terrific example of consumer-led innovation. As we're speaking to millennial parents who want products with an elevated aesthetic that are also made from materials that are better for the planet. We are looking forward to the North America exclusive launch at Walmart later this spring and a global launch beginning in the second half of 2024. This is a margin-accretive opportunity with plenty of runway from newborn toys and gyms to play sets and role play. Going forward, for Fisher-Price Core, we're looking to drive top line growth and higher profitability by emphasizing innovation, quality and proven play system, while better utilizing our design and engineering capabilities and meaningfully reducing cost of goods sold through improved planning. When it comes to preschool, it's all about driving kid demand and actively managing a portfolio of brands and character-driven products, including our own IP and top-tier partner IP. These toys support fine and gross motor skills, problem-solving cooperation and emotional intelligence as kids play out their favorite stories and their favorite characters. Let's start with everyone's favorite, Blue Tank Engine, Thomas, our iconic global preschool brand. Thomas is all about friendship. And this year, we're introducing a new segment called Talking Thomas, where all of our engines can literally interact with each other, Check it out. [Presentation]

We will broaden the character engines in our line and work to enhance our core track systems, leveraging learnings from our successful Vehicles category. We'll have even more to share later this year. And in late fall, we will be relaunching one of our iconic brands, Barney. The franchise relaunch will kick off later this year with a new preschool animated series, followed by an exciting toy line in early 2025. We're also excited about Imaginext. We have expanded our collaboration with the Walt Disney Company, and we'll introduce Star Wars into our Imaginext line this fall with incredible products like our over 2-foot tall interactive Darth Vader bot. We think this will have great appeal with our core preschool kid and will also be an exciting new form factor for adult fans and collectors. Continuing our partnership with Universal and Jurassic World, we're expanding our line with our newest Dino, Dilophosaurus. Not only is this great creative product, but it will build excitement for the anticipated summer theatrical release in 2025. Going forward, we expect to drive top line growth and increase profitability in the preschool segment by leveraging our global scale, deep catalog of iconic preschool brands as well as relationships with third-party IP owners. Aligned with our strategy for Fisher-Price, we're evolving our structure to manage these 2 new segments. Fisher-Price Core will continue to be managed from East Aurora, where we have a unique skill set and expertise in early child development. The preschool business will move to El Segundo to leverage the strength of our global brand teams' expertise and create closer collaboration with our franchise management and studio partners. As you can see, we're taking active steps and making strategic changes to Fisher-Price and the Infant, Toddler and Preschool category as a whole. We believe we can grow top line and improve margins to drive sustainable, profitable growth. As Ynon said, we have an opportunity to innovate and compete in our challenger categories, which includes action figures, games, building sets and other. These categories in total generated over $1 billion of gross billings in 2023. Action figures is a category driven by theatrical movies. With a lighter theatrical slate this year, we will emphasize our evergreen brands that have built-in fan bases. For example, Masters of the Universe revolution on Netflix has premiered to strong audiences, which we will use to ignite our collector fan base with new product, including the Motu Masterverse toy line. We're excited about a new collaboration with Teenage Mutant Ninja Turtles with crossover figures. This will bring together 2 passionate fandoms with this product line. Take a look. [Presentation]

With Jurassic World, we're launching new product innovation with the all-out attack T-Rex, featuring a cool attack moment. This is in addition to a brand-new chaos theory animated series on Netflix that will amplify the entire product line. And we look forward to another successful theatrical film release in the Jurassic World franchise coming in summer 2025. Our Games category is led by iconic brands that bring people together, including UNO, Pictionary and Scrabble. Guided by our consumer-centric design approach, we're finding new ways to expand gameplay with UNO. UNO Show No Mercy adds more cards and special rules that consumers have been asking for. Per Circana, this became the #1 new card game in the U.S. with limited distribution. This year, we're extending UNO into a new line that blends the UNO Play Love with elements of collectible card games in UNO Elite. This new collection begins with an exciting partnership with the NFL. Scrabble Together will expand its adult games internationally with a double-sided board with a new cooperative mode where you win or lose as a team. Pictionary versus AI was last year's best-in-class example of Mattel's ability to bring relevant products to market quickly, going from idea to shelf in just over 8 months. Let's take a look. [Presentation]

Games is an important challenger category for us, given the high margin and the bridge to our franchise management strategy, connecting physical and digital play. As the success of Mattel163, mobile games is demonstrating, lots more to come. In Building Sets, we look to inspire creativity through authentic building experiences. Per Circana, MEGA is a proud #2 in the category and gained global market share in 2023. Our business is divided between 2 segments: MEGA BLOCKS, which offers a larger form factor for infants and toddlers and Standard Bricks, which focuses on older kids and collectors. Our MEGA BLOCKS line is erred by our 80-piece building bag, which is the best-selling junior building set in the world per Circana. We will introduce the Rise and Snooze Night Light this fall. Which features both bedtime and morning routines that parents can share with their children in a building block format. Mega standard bricks are expanding among both kids and adults and achieved double-digit gross billings growth in 2023. In 2024, our collection with Pokémon will benefit from the introduction of more Poké balls that encourage collectability. Our Hot Wheels building sets continue to gain momentum, and you will see more launches in our adult segment with premium brands, including an amazing 1963 Corvette Grand Sport. With Hot Wheels being the #1 vehicle brand, expanding into this buildable vehicle segment is a great differentiator for us and we believe it will be a significant growth opportunity down the road. We will also continue to partner with new licenses and expand our presence in the adult space. Check out this life-like Microsoft Xbox we created last fall as a Target exclusive that sold out in 2 hours during the presale. We look forward to its global launch this year. There are many more exciting announcements to come. From Godzilla versus Kong to one of the most iconic moments in music history with Ladies & Gentleman, the Beatles! commemorating the moment 60 years ago on the Ed Sullivan show, all true to fandom building experiences. As you can see, it's an extraordinary and fun time to be at Mattel. We have an amazing portfolio of toys and brands that matter, fueled by our evolved Mattel playbook, we are leading with the most purposeful, culturally relevant products and experiences in the industry. Our brands allow people of all ages and backgrounds to connect with each other through the shared experience of play, while creating meaningful positive and societal impact in the world. We couldn't be prouder of our purpose to empower generations to explore the wonder of childhood and reach their full potential. And with that, I'll leave you with a blight video of our 2024 lineup as I pass the mic to Josh Silverman to talk about franchise management. Thank you. [Presentation]

Thanks, Lisa. It is an incredible privilege to oversee franchise management at Mattel. This encompasses consumer products, content, digital and lab experiences. Prior to joining Mattel, I spent over 20 years at the Walt Disney Company and Marvel Entertainment, leading several areas, including global consumer products and franchise management, creative and product development, the Disney Store, commercialization for Disney Interactive and Disney Publishing Worldwide and more. Now 18 months into the role, the potential for the Mattel portfolio is even more exciting than I could have envisioned. As Ynon said, Mattel is the owner of one of the most iconic brand portfolios in the world. We believe there is a tremendous untapped opportunity to complement our successful toy business, amplifying the purpose behind our brands and the incredible ways they connect to fans. We expect franchise expansion to fuel Mattel's next chapter of growth. We've developed a globally integrated ecosystem in toy and entertainment bring Mattel's brands, franchises, characters and stories to life through holistic consumer experiences across multiple entertainment verticals. Franchise management is a core strategic capability at Mattel. We activate all lines of business in concert, ensuring we fully maximize the commercial upside. As we have heard, there is no better demonstration than last summer's Barbie movie, when we turn the world pink with more than 165 culturally relevant consumer product partnerships, digital gaming activations, live experiences, publishing and more. As Ynon shared, we now think of people who buy our products as more than consumers. They are fans. This shift in mindset has opened a new realm in the entertainment landscape. I'm pleased to share an overview on these areas of acceleration. Consumer Products is key to our growth and broadening Mattel's best-in-class offerings through exciting brand partnerships across all shopper categories and retail platforms. A $300 billion market globally, consumer products is a growth area that includes numerous categories such as fashion, home, apparel, food, health and beauty. These businesses are fee or royalty-based licensing models that represent both top line and bottom-line opportunities at high margins. Building on our momentum from 2023, this year, we have more lifestyle offerings across demographics. For example, we have expanded into the cereal aisle with Hot Wheels and UNO and Masters of the Universe adult fans are now able to enjoy their breakfast with Skeletor’s special plan of Dark Matter Coffee. A broader product offering at retail can also be our toy business by creating franchise statements and even opening new distribution channels for our toys and further accentuating our franchises as specialty apparel accounts like Gap and Zara. In addition to product partnerships, we've been expanding our revenue driving brand partnerships with companies like Google, Walmart and most recently, Verizon, which featured Beyonce as Bar-Bay, in its recent Super Bowl commercial. We are also growing our Quick Serve Restaurant promotions around the world with UNO and Hungry Jack in Australia, Thomas and Friends with McDonald's in Japan, and the Sonic program that just launched in the United States for Hot Wheels Skate, supporting our toy launch into the fingerboard category. Immersive storytelling is key to capturing the imagination of our fans and is a critical form of engagement within Mattel's franchise ecosystem. At Mattel Television Studios, we develop and distribute episodic and long-form content to expand Mattel characters and stories across linear and streaming platforms worldwide. Television content drives connection through high frequency and allows us to introduce characters, storylines and worlds. Building fandom that transcends age and sustains brand engagement. To further extend our episodic content universe, we have brought on new senior level leadership with world-class capabilities. We will continue raising the bar this year with best-in-class talent in front and behind the camera to take Mattel's IP and franchises to a whole new level. Mattel Television Studios has 13 series and specials currently in production and over 35 series and specials in development with more to come. Our television content reaches audiences in more than 190 countries and more than 30 languages and spans live action scripted, unscripted and animated formats. This year, we debuted on Netflix, Masters of the Universe: Revolution, the sequel series to Masters of the Universe: Revelation. Revolution boast an all-star voice cast that includes the talents of William Shatner, Mark Hamill, Lena Headey and more. Hot Wheels is expanding on the branch then with Hot Wheels Let's Race, an all-new animated series on Netflix. Here's a look at what you could expect from the series premier season. [Presentation]

Talk about high energy. There's even more to be excited about in television this year. Fans around the world will also enjoy new animated seasons of Thomas and Friends, Polly Pocket and a new special Barbie and Stacey to the Rescue, all releasing on Netflix. And we just announced that Season 2 of the animated series Monster High, will debut on Nickelodeon. Of course, we can't wait to unveil the highly anticipated Barney's World series coming to MAX and Cartoonito this fall. Barney's World is just one component of the Barney franchise relaunch. Mattel's comprehensive revitalization of Barney will span television, film, music and YouTube content. And a full range of kids products including toys, books, consumer products as well as a apparel accessories featuring classic Barney for our nostalgic adult fans. Franchise brands like Barney are the bridge between our toy business and entertainment offering and are foundational to our globally integrated ecosystem and strategy to bring Mattel brands to life through a holistic consumer experiences. You can expect more franchise brand relaunches from Mattel in the coming years as we continue to mine our significant portfolio of IP and drive growth through the deployment of our strategic multi-platform approach. Print publishing turns our brands into stories and puts format to inspire, educate and entertain readers of all ages. The $100 billion industry of print publishing is one of those areas where we continue to expand globally through new content business models. Last year, we announced the launch of Mattel Press in North America. Our new publishing arm supported by a sales and distribution partnership with Simon & Schuster. We expect to publish over 50 titles per year, including titles tied to our content slate, such as Hot Wheels: Let’s Race, Thomas & Friends: All Engines Go, Monster High and Barney's World as well as title supporting brand initiatives and new storytelling. In addition, Mattel Press will launch original stories such as an illustrated Barbie Chapter Book Series and other picture works based on Mattel's IP, and retail distribution for American Girl's long-running book series like the Smart Girls guide. We are ramping up Mattel's music repertoire, proactively managing our music portfolio and enriching it with marketing and distribution to grow revenue and maximize music IP opportunities. With our global partner, Warner Music Group, last year we saw over 30 music releases spanning 6 different brands, including Barbie, American Girl, Thomas, and Monster High, with global audio streams up 35% year-over-year. And we're planning 40 new music releases in 2024, including Hot Wheels and Barney. Separate from the Barbie movie, Mattel partnered with Atlantic and Warner Bros. for the Barbie movie album, which debuted at #2 on the Billboard 200 chart and was streamed 52 million times on Spotify during the films' opening weekend. The Barbie album also won 3 Grammy awards, including Best Compilation Soundtrack for Visual Media. Live experiences or location-based entertainment bring our brands to life through immersive environments where fans can share experiences and create lasting memories. These experiences come to life in various formats. Traveling exhibitions, hospitality, live entertainment, permitted attractions and theme parks with experiential retail, a key part of each experience. Last year, Mattel fans came together in over 200 global cities to create meaningful connections with our brands. We had an credible year for Barbie with our traveling exhibitions, Malibu Barbie Café and World of Barbie. The Malibu Barbie Cafe will continue to expand currently in Miami and will open this summer in Nashville. And we continue to expand World of Barbie, which is now in Saudi Arabia with more cities launching in the United States and Europe later this year. The new Barbie Dream Lounge restaurants will be opening this summer in Nuevo Leon, Mexico, offering trendy and Instagramable food in a beautifully designed, fast casual setting. We are excited about our partnership with Atlantis Bahamas Resort. The program opens this summer with Barbie-theme Suites, kids club activities, food and beverage offerings and an immersive experience for vacation goers to engage in. And we are thrilled to debut Barbie The Movie: In Concert, a symphony toward launching this summer. Music venues in 37 cities in the United States and Canada, including a special performance at the Hollywood Bowl will be transformed to Barbie land as guests experience the full-length feature film accompanied live by Sinfonietta, an all-women majority women of color orchestra renowned for their musical skill and style. Needless to say, Barbie is more relevant than ever and is thriving across the location-based entertainment and live experience space. Hot Wheels Monster Trucks Live has surpassed the 2 million total attendee mark. The show continues to smash the tours records, reaching 60 global cities in 2023 and planning for over 85 cities in 2024. The tour continues to grow in the United States, Europe, Latin America, Middle East and Australia, and will integrate new brand, characters and themes to enhance the fan experience. Similarly, Day Out With Thomas has been delighting families and fans for over 29 years and counting. This touring event operates in 8 countries makes over 400 stops and attracts over 700,000 attendees annually. We are thrilled for fans to experience Mattel Adventure Park, which is the first time we celebrated our brands together in a theme park and an example how we're elevating the Mattel brand throughout our franchise business. Opening in the fourth quarter within the VAI Resort, a state-of-the-art entertainment destination in Glendale, Arizona, Mattel Adventure Park will incorporate more than 10 marquee Mattel brands, including a Barbie Beach House and 2 thrilling Hot Wheels roller coasters, the Hot Wheels Boneshaker: The Ultimate Ride and Hot Wheels Twin Mill Racer. And this is just the beginning of our theme park ambitions. We will have more to share in this space soon. It would be impossible to claim relevance today without acknowledging the dramatic effect that technology is having on the way we play. Digital experience Mattel's Digital Games extend physical play to the virtual world by creating immersive entertainment experiences that drive sustained engagement for fans of all ages. It is an important strategic initiative to capture more share of this $180 billion industry. Mattel Digital Games launched 5 stand-alone titles and 7 integrations in 2023 through licensing partnerships with top-tier gaming platforms and developers. We now have over 48 million monthly active players, a record for Mattel. We launched Barbie and American Girl first-ever stand-alone games on Roblox, with Barbie Dreamhouse Tycoon attracting over 150 million visits since launch in October of 2023, becoming Roblox' biggest branded game launch of the year. Following the smash hit of Hot Wheels Unleashed, we unveiled Hot Wheels Unleashed 2: Turbocharged in partnership with Milestone. We now have 11 million players in the Hot Wheels Unleashed franchise. We are excited to announce a new licensing partnership with Take-Two Interactive to publish a new Barbie mobile game plans for release later this year. Mattel will continue to expand our licensed digital games in 2024 with new partners and new experiences designed for fans of all ages. Mattel163, our gaming joint venture with NetEase, grew to nearly $200 million in revenue at very high margins. We are excited about the future of Mattel163, bringing our existing titles to new platforms, adding brands into the fold and reaching fans across geographies. Looking ahead, we plan to take digital gaming beyond IP licensing to self-publishing of Mattel mobile games. Complementary to our existing licensing and joint venture model, we will directly engage with our fans and deliver unrivaled gaming experiences. We expect this to significantly increase the revenue and profit potential at low investment for the company and to be a catalyst that drives the business forward. We're extending the emotional connection to our franchise brands through exciting consumer products, content, digital and lab experiences. We have robust plans in place for each line of business with clear road maps for how we would rapidly capture the full value of our IP through franchise management at Mattel. The Mattel brand has always had global reverence and now also has global relevance. We will leverage this awareness and momentum to elevate the Mattel brand as part of our 80th anniversary in 2025 to again create cultural moment across new categories, geographies and audiences. Thank you and now over to Robbie.

Thanks, Josh. As Ynon shared, we know the deep emotional connections that people of all generations have with our brands. They are more than consumers, they are fans and those fans speaking a record-breaking audience when the Barbie movie made its global premiere on July 21, 2023. Undeniably, 2023 became the year of Barbie, with Mattel's debut at the box office smashing record flooding movie theaters globally to pre-pandemic levels and creating a bona fide cultural phenomenon. Barbie has received over 450 combined nominations and awards highlighted by 8 Oscar nominations, including Best Picture. The film became the highest performer movie ever based on a toy. Barbie showed the world that Mattel brands boast an built-in affinity among audiences who are eager for new content. And Barbie showed the Hollywood community that we care about making quality feature films inspired by Mattel IP that can transcend cultures, borders and demographics. Our vision at Mattel Films is to collaborate with leading filmmakers to make standout quality movies based on our iconic brands that will resonate in culture and appeal to global audiences. The Barbie movie catapulted Mattel into the zeitgeist and was a showcase for that vision. We now have recognition in the entertainment space, broadening our relationships attracting the best talent and demonstrating how we empower and trust filmmakers to bring their vision to life on film. Our partners on the Barbie movie represents some of the greatest talents of this generation. Here is what they have to say about working with Mattel on Barbie. [Presentation]

Our approach to film partnerships allows us to be flexible and select the right partners for the right projects. Across our entire film slate, this has enabled us to collaborate with the very best in development, production, financing, marketing and distribution. Our capital-light model means we can pursue multiple movies at the same time and get them to market faster while also creating opportunity for meaningful economic upside. Outside of Barbie land, there's a lot happening here at Mattel Films with strikes behind us in a perfectly pink proof of concept for our film ambition, the next few years are shaping up to be very exciting. We recently announced that American Girls in development with Paramount Pictures and Temple Hill Entertainment, the creative team behind Twilight. We also announced Bob the Builder, Mattel's first animated feature coproduced with Oscar-winning animation house ShadowMachine, Jennifer Lopez' Nuyorican Productions and actor and recording artist Anthony Ramos, who will produce and voice Bob. Here to tell you about his vision for Bob the Builder is Anthony himself. [Presentation]

Thanks, Anthony. We can't wait to bring Bob the Builder to the big screen, and we continue to advance our previously announced films in development. Hot Wheels is in development with J.J. Abrahams' Bad Robot producing. Tom Hanks is attached to star in Major Matt Mason with Akiva Goldsman writing the script, and we are working on a Matchbox film with our partners at Skydance, the team behind Top Gun and Mission Impossible: Dead Reckoning. MGM will distribute Polly Pocket written and to be directed by Lena Dunham and co-produced by and starring Lilly Collins. We have partnered with Universal Studios and Vin Diesel's production company, One Race Films on Rock 'Em Sock 'Em Robots. Marc Forrester, whose credits include Quantum of Solace and Finding Neverland is attached to direct and produce a film based on the beloved Thomas & Friends franchise, and Universal will distribute Wishbone with Pete Farrelly producing. Mattel Films is also making meaningful progress on other projects in development based on Magic ball, UNO, View-Master as well as Christmas Balloon, a holiday family drama based on all new IP. In all, we have announced 15 films in development with much more to come. Each of these projects represents an incredible opportunity to create unforgettable films from our iconic franchises and unlock revenue potential across toys and consumer products, digital and live experiences and, of course, the box office. We look forward to sharing more and our progress across Mattel Films in the year to come. Over to you, Steve.

Thanks, Robbie. As we heard, 2023 was the year of Barbie and the Barbie movie was an amazing opportunity to showcase our demand creation capabilities and turn a movie into a global phenomenon. I'd like to give you some insight into how we did it. We deployed our proprietary mix of content, media and influencers, combined with merchandising and promotional with our retail partners to stimulate demand among generations of fans. Our advertising, creative and media complemented our in-store and online execution, giving us credible reach with our consumers and shoppers where it matters most on the ground where and when they are shopping with well-designed, well-timed and well-stocked displays. We created consumer-centric shopper journeys that began on mobile and led to omnichannel retail experiences, collaborations with our commercial partners in all regions to maximize excitement at key moments. And outside of our 500,000 doors and many, many windows, just incredible work from our franchise and consumer product team. More points of distribution and more opportunities to create demand. The global consistency of our commercial excellence is intentional. At Walmart, it was Welcome to Barbieland! Franchise activation. In the U.S. and Mexico, display-after-display of toys and consumer products in prominent locations across the store and online with a homepage takeover on walmart.com. Walmart's marketing collaboration was unique for the scale of the execution and also for the innovation. Walmart featured Barbie as a celebrity in its big summer marketing campaign alongside Patrick Mahomes and Becky G, and Mattel was proudly called on of the creative. Walmart branded and sponsored HGTV's Barbie Dreamhouse Challenge television show hosted by supermodel, Ashley Graham. An excellent display of our values in action with our largest retail partner collaboration, innovation and execution. With Amazon, we created Barbie's Best Week Ever, an award-winning franchise shopping experience. Amazon turned Pink to drive awareness for the movie and offer surprise daily deals over the 7-day period across beauty, accessories, home and toys to engage shoppers. From our traditional customers like our partners in Seattle and Bentonville to new retailers from Barcelona to Beijing, Mattel had more than 165 licensed partners in all regions, as Josh discussed. At Zara globally, an exclusive collection of apparel, accessories, shoes and home decor, supported by in-store and online activation, social media, brand ambassadors and events, which created a fan frenzy. Here is one take a one store in Spain. At Selfridges in the U.K., a takeover of the iconic Oxford Street Windows; a full cross-category selection across toys and consumer products, apparel, hair care and sporting goods; a 2-week pop-up corner shop and a Selfridges cinema takeover. At Primark, one of the biggest fashion retailers in EMEA, an exclusive apparel, home and accessories collection for men and women supported by a launch event. At Myer, a leading department store in Australia, there was girls and women's apparel, and sleepwear, outerwear and beauty brands, supported by an online digital takeover and landing page, and flagship store windows and a pop-up shop. And in the U.S. at Bloomingdale's an exclusive collaboration featuring contemporary fashion and accessories also supported by an online takeover, digital lookbook, social and e-mail marketing and a memorable in-store event. Our industry-leading brand marketing combined with Warner Bros. film promotional expertise made it impossible to live on planet earth and not know about the Barbie movie. We used Barbie's Facebook, Instagram and TikTok, to amplify drops of the trailers, cast photos and who could forget that Selfie Generator? We activated nearly 5,000 influencers with a cumulative social following of more than $200 million that include a popular names such as Kim and Khloe Kardashian. Our goal was to break convention and be original, just like the movie did. It was an amazing display of the evolved demand creation expertise that absolutely distinguishes Mattel. We took a capability that we've had for decades, evolved it and leveraged it to create entertainment history. As Ynon shared, we have elevated demand creation to a strategic priority, a clear competitive advantage in the toy category and a representative of our progress to advance and promote our entertainment strategy outside of the toy aisle. Marketing innovation is part of Mattel's DNA, our legacy and origin story in addition to being brilliant product visionaries our founders, Ruth and Elliot Handler, were, in fact, great marketing pioneers and collaborators with Walt Disney himself. In 1955, Mattel sponsored a 52-week segment on the Mickey Mouse Club at a time when toy companies only advertise during the holidays and TV advertising for toys was completely unproven. Those who came before us made certain that this company caught the first waves of mass media with TV advertising, and we have continued to evolve and stay ahead of the change curve ever since. We do not intend to follow the coming tide of marketing innovation, we intend to lead it. The only constant is change, consumers and media continue to evolve. Kids are increasingly difficult to reach. In recent years, Kids TV media has become supply constrained and more expensive as viewers shifted online into streaming platforms and fragmented across thousands and thousands of YouTube channels. TV viewership migrated to multiple devices and services, making it extremely challenging to aggregate audience and reach. Now, more than 60% of kids' video viewing is taking place on internet-connected devices compared to only 31% in December of 2019. Kids led the migration from TV to YouTube and other streaming platforms, and we surprise and delight them with high-quality content for our franchise brands where they now spend their time. We lead on the top ad-supported kids engagement platform, YouTube, where we are #1 for dolls and #1 for toy vehicles. We also serve parents, who for decades used to co-view with their kids but now can be found on social media where we create quality content for our channels on Facebook, Instagram and TikTok. On social media, we stated in the conversation and ahead of the competition with timely cultural relevance, connecting pop culture and societal trends to amplify fan engagement and broaden appeal. It takes expertise to manage the complexity of demand creation, and we have it. We recently created an integrated marketing communications team, which brings together our expertise at a global scale. This is where we research, societal trends and consumer insights, create best-in-class media assets and manage digital content and media to maximize our social channels. Another in-house strength at Mattel influencer marketing, also enables our brands to connect with pop culture, amplify fan engagement and broaden appeal. UNO was named one of AdAge's top 5 branded TikTok channels, with followers surpassing 1 million and 100 million video views. In 2023, we engaged with celebrity fans like Questlove and Giannis, content creators and leverage in-house production to create video assets with cultural relevance. We vet thousands of creators and partner to tell great stories about our brands, products, entertainment and live experiences. Mattel recruited a range of family and tween influencers to amplify the launch of new Monster High dolls in 2023. They shared a total of nearly 1,000 social posts that together earned 72 million views and over 224 million impressions across TikTok, Instagram and YouTube. Beyond our advertising and social media, our retail customers collaborate with us to engage their guests and promote our brands. Our omnichannel retail marketing team manages promotional collaborations with our customers to drive returns on those investments by maximizing promotional features, customer media and events. 77% of U.S. household shop our top 3 retailers at least once a week, and 96% of households shop our top 3 retailers at least once a month. If you factor retail impressions into reach, our best-in-class retail distribution is another sustainable marketing advantage. With our customers, we create innovative consumer-centric guest experiences merchandising and retail-tainment events to capture the hearts and minds of fans globally and to maximize engagement and share. If you can do this, fewer can do it well, and no one can do it like Mattel. Another showcase for how we engage audiences and fandoms, and execute our playbook is Mattel Creations. Mattel Creations is our DTC business serving adult collectors, bringing together consumers, commerce, community, content and culture with unique value propositions that are complementary to our core toy business where our demand creation expertise is driving excitement and consumer demand. Mattel Creations connects our brands to pop culture, artists and influencers, and blurs the lines between toys as art and art inspired by toys. Mattel Creations offers high-quality curated limited-edition products in special display packaging that are uniquely different from what we offer through our mass retail partners. With its own branded graphics and high-touch service, we offer a user experience that stands out in a crowded market. Our most loyal fans join our Mattel Creations membership program to gain exclusive access to limited run items, content and community features. Many of our collector drops sell out in minutes and these members get priority. Here are a few examples. Monster High Skullectors bit on this cool collab, which sold out at $150. For Hot Wheels Red Line Club members, a collaboration with renowned contemporary artists, Daniel Arsham, a 1:64 diecast Porsche speedster sold out at $70. And for 9,000 fans who backed a crowd-funding campaign of $550 ultimate Masters of the Universe collectible play set. For the movie, we offered exclusive screen-to-shelf toys, artist collaborations and celebrity content for our audience of Barbie fans, and highlighted the breadth of our franchise with our consumer product offering. Fans could not get Kenough of our Kenough Hoodie at $60, our top-selling item ever, and we responded quickly to the viral demand. On March 21 and 22, we are looking forward to Mattel Creations Revealed, a 2-day virtual event for our biggest fans, featuring exclusive content, behind-the-scenes access, and covet-worthy collectibles across our portfolio. Mattel Creations truly offers a role of possibilities to engage fans and expand audience in new and exciting ways. Our demand creation is a strategic priority for Mattel, and we believe it will only increase in importance as we grow our IP-driven toy business profitably and capture full value of our IP, and there's so much more ahead. And now Anthony will provide some perspective on our financial outlook and capital allocation strategy.

Thanks, Steve, and hello, everyone. Mattel has made significant progress over the last 6 years since the start of our transformation into an IP-driven, high-performing toy company. And today, is much stronger financially and well positioned for success. Our strategy is to grow profitably, capture the full value of our IP and continue with our disciplined cost management. Our much-improved financial performance and strong balance sheet, highlighted by our return to investment grade last year reflects our ability to generate significant cash flow and our favorable debt profile with no debt maturities until 2026, enables us to invest in growing the business even more and to continue share repurchases. These actions are consistent with our capital allocation priorities, designed to provide financial flexibility to manage capital structure, invest in growth opportunities and create long-term value for our shareholders. As Ynon said, we expect Mattel to outrace the industry in 2024 and gain global market share. Recapping our 2024 guidance on key metrics. We expect net sales in constant currency to be comparable to the prior year. With growth in Vehicles offset by a decline in Dolls as we wrap the benefits of the Barbie movie. And for Infant, Toddler, and Preschool as well as our Challenger categories collectively to be comparable to the prior year. With respect to the power brands, we expect Hot Wheels to grow, Fisher-Price to be comparable and for Barbie to decline. Further improving profitability, adjusted gross margin is forecasted to increase from 47.5% in 2023 to a range of 48.5% to 49%. the anticipated improvement is primarily driven by savings from our recently Optimizing for Profitable Growth program and favorable fixed cost absorption from increased production levels partly offset by wrapping the Barbie movie benefit. Further down the P&L, we are planning for advertising and adjusted SG&A to remain stable as a percent of net sales. Adjusted EBITDA is forecasted to be in the range of $975 million to $1.025 billion, an increase compared to $948 million in the prior year. Adjusted EPS is expected to grow double digits to a range of $1.35 to $1.45, compared to $1.23 in 2023 as we improve profitability and benefit from share repurchases. Free cash flow is projected to be approximately $500 million. We are operating in a macroeconomic environment that may impact consumer demand. The guidance considers what the company is aware of today, but remain subject to market volatility, unexpected disruptions and other risks and uncertainties. Beyond 2024, we expect Mattel to grow sales and earnings in 2025 with the anticipated benefit of improving industry trends innovation in toys, expansion of our entertainment offering and licensing partnerships as well as savings from our Optimizing for Profitable Growth program and the benefit of our share repurchase program. We have a strong track record of achieving cost savings. As you know, between 2018 and 2020, we achieved over $1 billion of cost savings through the Structural Simplification program. In 2023, we completed our very successful 3-year Optimizing for Growth Program that ultimately yielded annualized things of $343 million, compared to the initial target of $250 million and the revised goal of $300 million. Combining both programs we have now achieved a total of $1.3 billion in cost savings since 2018. Embedded in our DNA is now a mindset to drive ever greater efficiencies and productivity improvements across the business. To that end, we recently announced a new program aimed at further performance and efficiency improvements. The Optimizing for Profitable Growth program is a continuation of the company's cost reduction and performance enhancements. This has had a meaningful impact on the business, helping to restore and improve profitability, and we expect to further improve relative to where we are today. The program's aim is to achieve efficiencies, leveraging our scale and cost savings opportunities within our global supply chain, including our manufacturing footprint that we believe can further improve productivity, profitability and our competitive position. We are targeting $200 million of annualized savings by 2026 under this new program, which includes the previously disclosed initiative to close a plant in China. In terms of the P&L, we anticipate approximately 70% of the expected savings to benefit cost of goods sold and the remaining 30% to benefit SG&A. Costs and investments to implement the program are currently estimated to be between $130 million to $170 million. Given our strong track record, we are confident in our ability to execute this program. Cash generation is a major focus for us. In 2023, we generated $709 million in free cash flow. And over the last 5 years, have now generated cumulative free cash flow totaling nearly $1.5 billion. During this time, we repaid a portion of our debt and resumed share repurchases. With our improved financial position, and expectations to continue generating meaningful free cash flow, we anticipate having the financial flexibility to support and accelerate our capital deployment plans and enhance long-term shareholder value. We have substantially improved our financial position since 2017 through a combination of debt repayments, refinancings and growth in EBITDA. With our improved financial position and performance, we have now achieved a debt to adjusted EBITDA ratio of approximately 2.5x for the last 3 years. We achieved an investment-grade credit rating in 2023 following upgrades from Moody's and S&P Global and now Fitch. With this rating, we now have greater financial flexibility, access to additional liquidity and are able to optimize our cost of capital. The debt repayments and refinancings over the last few years have put us in a great position to manage our debt portfolio and invest in the business. Today, our bond portfolio is well positioned with no maturities until 2026 and an average coupon rate of approximately 4.7%. Our near-term capital allocation priorities aligned with our expectation to generate meaningful free cash flow going forward. Our first priority is to make investments to drive organic growth. This includes investing in innovation and strengthening cores, such as direct-to-consumer and digital marketing. We will make capital investments to increase our manufacturing capacity where we have a significant competitive cost advantage. And as Ynon said, we will now consider targeted investments supporting our entertainment strategy to advance our execution and capture a greater share of the potential economic upside. Our second capital allocation priority is to maintain a leverage ratio in the range of 2 to 2.5x debt to adjusted EBITDA and our investment grade rating. Our third priority with the benefit of a stronger balance sheet is to pursue M&A and other corporate development opportunities, which we believe can advance our strategy, improve our growth profile and create economic value for shareholders. Fourth, we will repurchase shares as an effective and flexible tool to manage our capital structure. Notably, we resumed share repurchases in 2023, fully utilizing our remaining authority of approximately $200 million. With our strong balance sheet and consistent with our stated capital allocation priorities, we recently announced a new multiyear share repurchase program with an authorization of $1 billion. This action reflects confidence in our strategy to grow sales, earnings and cash flow and create long-term shareholder value. We have begun to execute the program in 2024 and plan to fund repurchases with free cash flow. As you have seen through our presentations, Mattel is successfully executing its strategy. We meaningfully strengthened our financial position and look to drive further performance and efficiency improvements across the business that will benefit the bottom line and position Mattel for long-term growth. We are well positioned for success and remain focused on creating long-term shareholder value. Thank you. I will now pass you back to Ynon for closing remarks.

Thank you, Anthony, Steve, Robbie, Josh and Lisa for your presentations and leadership. Mattel is a leading global toy and family entertainment company and owner of one of the most iconic brand portfolios in the world. We are a purpose-driven company. We are here to empower generations to explore the wonder of childhood and reach the full potential. We do that by creating innovative products and experiences that inspire fans, entertain audiences and develop children through play. Our purpose and mission, combined with our commitment to contribute to a more diverse, equitable, inclusive and sustainable future, is our north star. We prioritize workplace culture under our leadership values of collaboration innovation and execution. We are proud of the numerous recognitions we have received for our achievements in this important area from the world's leading authorities on workplace excellence. I would like to thank the entire Mattel team for their commitment to our purpose and mission, and the significant progress we have made over the past few years. We believe we are well positioned to continue the successful execution of our strategy to profitably grow our IP-driven toy business and expand our entertainment offering, and to create long-term shareholder value. Thank you again for joining us and for your interest in Mattel.