Mattel CEO: 'Our turnaround is complete,' and toy company is in 'growth mode'

Mattel CEO Ynon Kreiz joins Yahoo Finance Live to discuss the company's fourth quarter earnings, its brand portfolio, and the outlook for continuous growth.

Video transcript

BRIAN SOZZI: Shares of Barbie maker Mattel are moving higher after better than expected earnings. A few things of note here-- first, Mattel says its turnaround is over and it's now in growth mode. And two, the company released pretty compelling outlooks for 2022 and 2023.

Let's dive onto this with Mattel chairman and CEO, Ynon Kreiz. Ynon, always good to see you. Thanks for taking some time this morning. Last year was a big year for toys for Mattel, but also the industry. Is there any indication that this may slow down a bit this year?

YNON KREIZ: Well, Brian, this was another exceptional quarter and year for Mattel. We outpaced the industry and gained share globally for the second year in a row and in every measured market. We had the highest annual growth rate in decades, with growth in six of seven categories where we operate and in each of our power brands-- Barbie, Hot Wheels, Fisher-Price, and American Girl.

So we were not just riding the wave of the industry. We outpaced the industry and continue to grow. And we say the headline is that our turnaround is now complete. And the company is in growth mode.

The strength of the company is broad-based. And we expect to continue to gain market share and, as you mentioned, with strong growth in '22 and '23, and are not stopping there.

BRIAN SOZZI: Is part of the story, Ynon, on market share gains that, you know, so many families are spending more time in their homes and buying more toys?

YNON KREIZ: Part of it is driven by COVID-related demand. But a lot of it is really about the strength and resilience of the toy industry. The industry has been growing for 10 consecutive years. It's expected to continue to grow for the next-- 2025 by Euromonitor, at over 5% CAGR, and reach $100 billion in 2023.

It's a strategic category for retailers. It's experiential. It drives foot traffic. The items are not expensive. And parents forever will spend money on children, especially when it comes to quality product and trusted brands.

Play is here to stay. And we are leading the industry with momentum. We-- it's-- Mattel was the number one toy company in the fourth quarter. And we see demand for our product at levels we have not seen in years. And this is beyond COVID. We believe the industry will continue to grow. And within that environment, we will outpace the industry and grow even further.

BRIAN SOZZI: Is this the year, though, Ynon, where toys go from accessible in terms of price points to expensive just given everything we have been seeing here with inflation?

YNON KREIZ: Well, inflation is a factor, clearly. And this is not unique, obviously, to the toy industry alone. We see it across the economy. But the items are still, relatively speaking-- are accessible. And parents, as I said, will continue to prioritize investing in children, especially for product that helped develop, inspire, and entertain.

This is the language we speak. We invest heavily in design and development. We make sure that our product have cultural relevance and brand purpose that gives it value beyond the play system. And with that, we expect to continue to engage consumers and really talk to families, talk to parents, and be their partner in entertaining, developing, and inspiring their children.

BRIAN SOZZI: Have you had to raise prices?

YNON KREIZ: We did raise prices in the third quarter of last year. And it is one of the options we consider given these times of inflation. But when we raise prices, we always keep consumers in mind. We are being very thoughtful and are committed to maintaining the highest quality and the best value for consumers.

BRIAN SOZZI: You pulled off quite the coup recently, Ynon, getting some business from your longtime rival, Hasbro, in that Disney Princess business. How did you do that?

YNON KREIZ: Well, this was, a-- you know, a great win for former. Disney Princess and "Frozen" together are one of the crown jewels of the Walt Disney Company, incredible wealth of characters and stories. And it is important for Mattel for three reasons. It scales our portfolio as the global leader in the dolls category. It adds another accretive growth driver, both for top line and profitability for us, starting in '23. And also, it's strengthened our position as a partner of choice for the major entertainment companies.

It was also symbolic in our own transformation journey and symbolic milestone. And we expect to grow it from the current levels given our capabilities, expertise, and the fact that we know how to develop and grow evergreen franchises. So we're very excited about it. It's a meaningful win. And we expect to continue to grow from the current levels.

BRIAN SOZZI: And, Ynon, it does seem as though, just off this deal and staying on it, that Disney is placing a lot of confidence in Mattel and your leadership. A lot of these things were not in place before you arrived at the company. Do you see more opportunities to win more business from Disney over the next few years?

YNON KREIZ: Well, we worked very hard to improve our capabilities. To strengthen the company, and to position ourselves for growth. You see it in the numbers. You see it in the momentum. We have been growing for six consecutive quarters and gaining share for six consecutive quarters. And this is following years of restructuring and strengthening the platform.

We are positioning the company as a partner for all major entertainment companies. Given our scale, our capabilities, our global reach, the fact that we sell product in about 490,000 stores globally, this is a huge commercial network. And this is under 70% of our business because we also sell over 30% in-- through e-commerce. So we have a very large commercial infrastructure, very strong supply chain system that is a competitive advantage, and, obviously, tremendous design and development capabilities that-- at the highest level.

This is something we invest heavily in. And we are very excited to see how Disney is trusting us and, likewise, other entertainment companies see Mattel as a partner of choice.

BRIAN SOZZI: Well, it's good to see all your hard efforts there starting to pay off or continuing to pay off, I should say. I'll leave it there. Mattel Chairman and CEO, Ynon Kreiz, always nice to get some time with you. We'll talk to you soon.