It is July 21, 2022, and the Board of Directors of Mattel Incorporated has employed you as a consultant to assess and improve the company’s overall operations going into the third quarter of 2022. While sales and earnings for Mattel had strengthened in early 2022, there were several issues that were on the front burner for Chief Executive Officer (CEO) Ynon Kreiz. Gross margins had dipped in 2Q2022, primarily as a result of raw material cost inflation for the company’s products and also global supply chain problems. Further, there were imminent signs from big box retailers that the U.S. consumer was increasingly under pressure. Consumers were slowing consumer purchases for discretionary items like toys or spending their limited resources on necessities like food and fuel. These issues had combined to stall Mattel’s robust stock price in spite of strong sales and earnings in 2Q2022. Your assignment is to review current company strategy and operations in order to recommend a set of specific and measurable actions for the company to take to (1) manage input cost inflation for the company, (2) respond to a potential downturn in consumer spending in the second half of 2022, and (3) restore the company’s stock price to sustainable growth. Please prepare a report to Mattel’s board of directors that makes a list of action recommendations that the company needs to follow into order to fully address all three of these areas in fiscal 2022.

Speaking in July 2022, Mattel Chief Executive Officer Ynon Kreiz had the following to say about the company’s performance:

Mattel achieved another quarter (2Q2022) of exceptional results, with double- digit growth in revenue and adjusted EBITDA despite significant inflation. This was the eighth consecutive quarter of increased top line performance, reflecting the strength and breadth of our portfolio and the success in executing our strategy. However, we are mindful of the concerns related to the global supply chain and the macroeconomic outlook, including inflation that may impact consumer spending. Like all companies, we are not insulated from market volatility and negative conditions.

While satisfied with the improvement in the company’s overall progress, investors had grown increasingly restless regarding the apparent stall in the company’s stock price in 2022. See Mattel’s recent stock price action here.

As a result, the Mattel Board of Directors requests a specific and measurable recommendation in each of the following three areas:

• A recommendation to manage input cost inflation for the company’s products,
• A recommendation to respond to a potential downturn in U.S. consumer spending, and
• A recommendation to restore Mattel’s stock price to healthy and sustainable growth.

Your report should be prepared as a three-page Executive Summary of Recommendations. Your recommendations should be specific and be clearly supported by your analysis of the company’s financial situation. You may supplement your 3-page summary with an appendix that contains

• an analysis of the company’s financial statements and/or pro-forma financial projections and
  • other appendices that you consider appropriate. You must include a table of References to sources that you use in your Executive Summary.

Case Submission:

• Create your summary as a Word document and submit by clicking the title of this assignment and attaching your saved document to the link provided. Please use Times New Roman, 12pt. Font, Single and/or Double Space.

Notes:

• Three pages MAXIMUM for your Executive Summary of Recommendations. This three-page maximum does not include any Appendices or the Reference list.

• It is required that you cite your sources in your recommendations and provide a

reference list in your appendices.

• It is not required that you add any appendices to this assignment. Appendices are optional.

• Please use the Executive Summary template that is provided to make your report.