Ladies and gentlemen, thank you for standing by. My name is Brent, and I will be your conference operator today. At this time, I would like to welcome everyone to the Mattel, Inc. fourth quarter 2022 earnings conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question-and-answer session. If you would like to ask a question at that time, simply press star followed by the number one on your telephone keypad. If you'd like to withdraw your question, again, press star one. Thank you very much. At this time, I would like to turn the call over to Mr. David Zbojniewicz, Head of Investor Relations. Sir, please go ahead. Thank you, operator, and good afternoon, everyone. Joining me today are Ynon Kreiz, Mattel's Chairman and Chief Executive Officer, Richard Dickson, Mattel's President and Chief Operating Officer, and Anthony DiSilvestro, Mattel's Chief Financial Officer. As you know, this afternoon, we reported Mattel's 2022 third quarter financial results. We will begin today's call with Ynon and Anthony providing commentary on our results. After which, we will provide some time for Ynon, Richard, and Anthony to take questions. To help supplement our discussion today, we have provided you with a slide presentation. Our discussion, slide presentation, and earnings release may reference non-GAAP financial measures, including adjusted gross profit and adjusted gross margin, adjusted other selling and administrative expenses, adjusted operating income or loss and adjusted operating income or loss margin, adjusted earnings per share, adjusted tax rate, earnings before interest, taxes, depreciation, and amortization or EBITDA, adjusted EBITDA, free cash flow, free cash flow conversion, leverage ratio, net debt, and constant currency. In addition, we present changes in gross billings, a key performance indicator. Please note that we may refer to gross billings as billings in our presentation, and that gross billings figures referenced on this call will be stated in constant currency unless stated otherwise. Our accompanying slide presentation can be viewed in sync with today's call when you access it through the investor section of our corporate website, corporate.mattel.com. The information required by Regulation G regarding non-GAAP financial measures, as well as information regarding our key performance indicator, is included in our earnings release and slide presentation, and both documents are also available in the investor section of our corporate website. The preliminary financial results included in the press release and slide presentation represent the most current information available to management. The company's actual results, when disclosed in its Form 10-Q, may differ from these preliminary results as a result of the completion of the company's financial closing procedures, final adjustments, completion of the review by the company's independent registered public accounting firm, and other developments that may arise between now and the disclosure of the final results. Before we begin, I'd like to caution you that certain statements made during the call are forward-looking, including statements related to the future performance of our business, brands, categories, and product lines. Any statements we make about the future are, by their nature, uncertain. These statements are based on currently available information and assumptions, and they are subject to a number of significant risks and uncertainties that could cause our actual results to differ from those projected in the forward-looking statements, including risks and uncertainties associated with the COVID-19 pandemic and the Russia-Ukraine war. We describe some of these uncertainties in the Risk Factors section of our 2021 annual report on Form 10-K and on our second quarter 2022 quarterly report on Form 10-Q, our earnings release and the presentation accompanying this call, and other filings we make with the SEC from time to time, as well as in other public statements. Mattel does not update forward-looking statements and expressly disclaims any obligation to do so, except as required by law. Now, I'd like to turn the call over to Ynon. Thank you for joining our third quarter 2022 earnings call. The third quarter results reflect the resilience of our diversified portfolio and the success in executing our strategy. Despite significant inflation, foreign exchange headwinds, and a challenging macroeconomic environment, we achieved growth in net sales in constant currency and adjusted EBITDA. Looking at the third quarter financial highlights compared to the prior year third quarter, net sales were flat and up 3% in constant currency, making it the ninth consecutive quarter of growth. Year to date, net sales increased 10% and 13% in constant currency. Adjusted operating income was down 1%. Year to date, adjusted operating income was up 22%. Adjusted earnings per share was down $0.02. Year to date, adjusted EPS was up $0.30 or 38%. Adjusted EBITDA increased $10 million or 2%. Year to date, adjusted EBITDA was up $125 million or 18%. Per The NPD Group, for the third quarter and year to date, Mattel was the number one toy company in the U.S. overall, and number one globally in our leader categories, dolls, vehicles, and infant, toddler, and preschool. Our power brands, Barbie, Hot Wheels, and Fisher-Price, were each the number one property in their respective categories. Looking at gross billings in the third quarter in constant currency compared to the prior year, Mattel grew 3%. Vehicles, action figures, and building sets all grew double digits. While dolls was flat, and infant, toddler, and preschool declined single digits. Geographically, our international segment grew double digits, partially offset by a mid-single digit decline in North America. Year to date, total company gross billings grew 13%. Total company POS was essentially flat in the third quarter, with growth in all international regions offset by a decline in North America. Our 2022 price increases have been successfully implemented. While it is still early, we have not seen a meaningful impact on consumer demand. Adjusted EBITDA benefited from pricing actions and cost savings, which more than offset significant cost inflation. We are maintaining guidance for the full year 2022 net sales growth in constant currency of 8%-10%, yet we do see a more challenging macroeconomic environment and increased volatility heading into the latter part of the year. As we expect higher pressure on gross margin, we're revising guidance for 2022 adjusted EBITDA down slightly to $1.05 billion-$1.1 billion, representing growth of 4%-9% versus 2021. Anthony will cover our updated guidance in more detail shortly. In the fourth quarter, we have higher advertising and planned promotional activity, and have secured more shelf space and omni-channel retailer support compared to the prior year. We also have greater holiday toy list representation and much stronger in-stock and inventory levels than this time last year. We expect POS to accelerate in the fourth quarter and to outpace shipping. Beyond this year, 2023 is shaping up well. This will be driven by strong cross-category innovation and the broadening of our portfolio, including the global rollout of Monster High, the return of Disney Princess and Frozen franchises, and the addition of Universal Trolls, as well as the global premiere of the Barbie movie, our first theatrical release. We plan to provide full year guidance for 2023 during our 2022 fourth quarter call. The year-to-date performance and full year outlook are in line with our strategy to grow Mattel's IP-driven toy business and expand our entertainment offering. Mattel strengthened its position as a partner of choice for the major entertainment companies. We recently extended our relationship with the Pokémon Company by signing a multi-year license renewal for building sets in all major markets. Mattel Creations continues to gain momentum as a highly curated DTC experience targeting the collector market with exciting new products and an international expansion. We continue to make progress on capturing the full value of our IP in highly accretive business verticals outside of the toy aisle. The Monster High live action television musical movie premiered earlier this month and was the number one kids and family movie on Paramount+ during its launch week. The movie also reached over four million total viewers on linear Nickelodeon networks. Following this strong performance, the sequel has just been greenlit. The Monster High animated series will launch just in time for Halloween. Pictionary premiered on Fox and CBS affiliates in September and is growing audience week-over-week. A second season of the new animated preschool series, Deepa & Anoop, will premiere on Netflix in November, and we recently announced new seasons for Thomas & Friends, Polly Pocket, and Fireman Sam. The latest Barbie animated movie was just released on Netflix today. Part of a new multi-year agreement with Netflix for exclusive content that will also include three original series. The Barbie theatrical film continues to generate audience excitement. Having completed principal photography this past summer, the movie is currently in post-production, and we eagerly anticipate its global release in July next year. We also expanded our presence on Roblox to include Barbie and Polly Pocket in the Livetopia virtual world, in addition to our Hot Wheels and Masters of the Universe standalone games on the platform. In the growing space of NFTs, we announced a digital art collaboration for Barbie with women's empowerment brand Boss Beauties for 15,000 one-of-a-kind NFTs to debut later this year on Mattel Creations. Mattel is being recognized for its achievements in workplace culture and employee well-being. Mattel was recently included among the world's best employers by Forbes, best workplaces for innovators by Fast Company, 100 best companies by Seramount, and the healthiest 100 workplaces in America. All in all, this was a good quarter for Mattel, with the ninth consecutive quarter of year-over-year net sales growth in constant currency. Year-to-date results show that we are successfully navigating a complex environment. The strategy to grow our IP-driven toy business and expand our entertainment offering is working. We look forward to the all-important holiday season and believe we are on track to achieve another growth year for the company. While we are seeing higher volatility related to macroeconomic challenges that may impact consumer spending, the toy industry has historically demonstrated its resilience during difficult economic times and is forecast to grow for the full year and thereafter. We believe our fundamentals are strong. Mattel's portfolio is resilient and well-balanced, with thriving brands that continue to drive increased consumer engagement and cultural relevance. There is new product innovation in all categories, and we are entering new white space opportunities. Our partnerships with the major entertainment companies are growing, and we are winning new key licenses. We are making progress on capturing the full value of our IP in highly accretive business verticals outside the toy aisle, with more opportunities in content, digital experiences, and consumer products. The balance sheet is healthy and about to become another growth lever. Our world-class leadership team and global organization are executing with excellence. We believe we are well positioned to further grow the business, increase market share, and create long-term shareholder value. Now Anthony will cover the financial performance in more detail. Thanks, Ynon, and good afternoon. As Ynon said, we achieved good results for the quarter in the midst of a challenging macroeconomic environment. We generated net sales of $1.756 billion, flat to the prior year, and up 3% excluding the negative impact of currency translation. Adjusted gross margin increased by 50 basis points as the benefit of pricing actions and cost savings more than offset cost inflation. Adjusted operating income was $398 million, declining 1% due primarily to an increase in advertising expense, mostly offset by the increased adjusted gross margin percentage. Adjusted EPS was $0.82 compared to $0.84 in the prior period, a decline of 2%. Excluding the one-time cost associated with the debt paydown in the prior year, interest expense was comparable to the prior year, while the adjusted tax rate increased two percentage points to 22%. Adjusted EBITDA increased $10 million or 2% to $473 million. Our year-to-date performance, which benefited from retailers increasing inventories in the first half, has been very strong, with key metrics increasing double digits. Net sales grew 10% and were up 13% excluding the negative impact of currency translation. Adjusted operating income increased 22% and adjusted EBITDA grew by $125 million or 18%. Turning to gross billings in constant currency, the third quarter was up 3% and year to date was up 13%. Dolls was flat with growth in Monster High and Polly Pocket, offset by a decline in Barbie and licensed properties. Barbie was down 3% after two full years of double-digit gains and the highest year on record. Year to date, category gross billings grew 3%. Vehicles increased 17%, driven by Hot Wheels, which also grew 17%, achieving a record third quarter. Year to date, category gross billings grew 25%. Infant, toddler, and preschool was down 6% due to declines in baby gear, newborn, and infant, partly offset by growth in Imaginext and Little People. Year to date, category gross billings grew 7%. Challenger categories in aggregate increased 3%, driven by double-digit growth in action figures and in building sets, partly offset by declines in plush and games. Year to date, Challenger categories gross billings grew 25%. From a geographic perspective, we achieved growth in three of four regions. North America declined 4% following a first half in which retailers accelerated purchases. Gross billings year to date were up 12%. Consistent with gross billings, POS declined by mid-single digits in the third quarter. EMEA achieved another strong quarter of growth, with gross billings increasing by 8%. POS was up low single digits and outpaced the industry. Latin America had an exceptionally strong quarter, with gross billings increasing by 23%, driven by growth in all reported categories and key markets. POS was up mid-single digits. Asia-Pacific gross billings grew 11%, driven primarily by strong growth in Australia and Japan, partly offset by declines in China, which continues to be impacted by COVID-related retail closures. POS increased double digits, primarily driven by gains in Australia. Quarter end retail inventory levels were up in both dollars and weeks of supply as we head into the holiday season. Inventory is of good quality and we are working closely with our partners to meet the anticipated acceleration in POS. Adjusted gross margin increased 50 basis points to 48.3% as pricing and cost savings exceeded significant cost inflation. Here are the components of the increase in gross margin. On the positive side, pricing, primarily the benefit of our mid-year actions, contributed 240 basis points. Savings from optimizing for growth added 140 basis points, and other factors added 30 basis points. These gains were partly offset by the impact of cost inflation, a negative 330 basis points, and royalties, negative 30 basis points, associated with the high growth of licensed properties. Moving down to P&L, advertising expenses increased 8% to $128 million as we support our brands and drive demand. Adjusted SG&A expenses of $323 million were comparable to last year as salary inflation was offset by lower incentive compensation expense and incremental Optimizing for Growth savings. Adjusted operating income declined by 1% to $398 million due to higher advertising expense, mostly offset by an increase in adjusted gross margin. Adjusted EBITDA increased by $10 million or 2% to $473 million. Year-to-date, adjusted EBITDA was up strongly by $125 million or 18%. Cash from operations for the year-to-date period was a use of $275 million, reflecting the seasonality of the business compared to $256 million in the prior year. The increased use of cash was primarily due to higher working capital usage, mostly offset by higher net income, excluding the impact of non-cash items, which in the prior year included the release of the deferred tax valuation allowances. Free cash flow year to date was negative $402 million compared to negative $371 million in the prior year. Capital expenditures increased to $127 million compared to $115 million in the prior year period. On a trailing twelve-month basis, we generated $303 million of free cash flow compared to $320 million in the prior period. The decline is due to increased working capital usage and higher capital expenditures, mostly offset by higher cash earnings. Increased working capital requirements are primarily due to declines in current liabilities and growth in inventory. Free cash flow conversion for the trailing twelve-month period was 27% compared to 33% in the prior year period. Taking a look at the balance sheet, cash balance was $349 million compared to $149 million in the prior year. Total debt was $2.574 billion compared to $2.698 billion. Total debt, net of the cash balance or net debt declined to $2.225 billion compared to $2.549 billion in the prior year, an improvement of $324 million, reflecting our free cash flow generation over the last twelve months. Looking ahead, we intend to use available cash in the fourth quarter to repay the upcoming maturity of the $250 million, 3.15% notes. Accounts receivable declined by $56 million to $1.382 billion, due primarily to the negative impact of foreign currency translation. Inventory was $1.084 billion compared to $854 million last year, an increase of $230 million or 27%. The increase reflects higher quantities as we accelerated seasonal production and the impact of cost inflation, partly offset by currency translation. This position has improved meaningfully relative to last quarter when inventory was up $360 million or 44%, and we expect the trend to continue to improve. Leverage ratio at the end of the third quarter was 2.3 x debt to adjusted EBITDA compared to 2.8 x in the prior year. The improvement is driven by the combination of growth in adjusted EBITDA and debt reductions. We continue to make progress toward our goal of achieving an investment-grade rating. We continue to generate significant cost savings. Optimizing for Growth program savings were $29 million in the quarter, $24 million of which benefited cost of goods sold. Looking ahead, we continue to expect the program to achieve incremental savings of $80-$90 million in 2022, and total savings of $250 million by 2023 since launching the program in 2021. As Ynon mentioned, we are maintaining our guidance for full year 2022 net sales growth in constant currency of 8%-10%. This is expected to be driven by vehicles and infant, toddler and preschool categories, led by Hot Wheels and Fisher-Price and Thomas & Friends, respectively, as well as our challenger categories in aggregate, led by action figures. We now expect the dolls category to decline slightly with Barbie and American Girl to decline low single digits. We are confident about the long-term growth trajectory of Barbie and American Girl. We now anticipate that currency translation will have a negative impact of 3-4 percentage points on net sales, reflecting the recent adverse movement in foreign currency rates. Adjusted gross margin is now expected to be approximately 47% compared to 48.2% in 2021. This is modestly below our prior guidance from July and reflects the financial impact of managing higher inventory levels through the balance of the year. Adjusted EBITDA is now expected to be in the range of $1.05 billion-$1.1 billion, slightly below our prior guidance and up from a 2021 base of $1.007 billion, representing growth of 4%-9%. The change from the prior guidance reflects the lower gross margin expectation and the impact of currency translation. We continue to expect as a percent of net sales, SG&A to decline and for advertising to remain relatively flat. From our 2021 base of $1.30, adjusted EPS is now expected to increase to a range of $1.32-$1.42 per share. We continue to expect an adjusted 2022 tax rate of 26%-28% compared to 25% in 2021. Consistent with prior guidance, capital expenditures are forecast to be in the range of $175 million-$200 million, an increase from prior year as we strategically invest to increase manufacturing capacity in our owned dolls and vehicles facilities in which we have a significant competitive cost advantage. We are operating in a challenging macroeconomic environment with higher volatility, including inflation that may impact consumer demand. The guidance considers what the company is aware of today, but remains subject to further market volatility, any unexpected disruption, and other macroeconomic risks and uncertainties. With respect to our previously stated 2023 goals, given the increased volatility in the market as well as the revised 2022 outlook, we are reevaluating our expectations and will provide annual guidance for 2023 on our 2022 fourth quarter earnings call. That said, we are confident in our continuing growth trajectory and expect top and bottom line growth next year. In closing, Mattel executed a good quarter and we are very pleased with our year-to-date results with double-digit top and bottom line growth. We are improving our leverage ratio and consistent with our capital allocation priorities are making progress towards achieving investment-grade credit ratings. We believe we are well-positioned to continue our growth trajectory. Thanks for your time today, and I will now turn it over to the operator for Q&A. At this time, I would like to remind everyone in order to ask a question, press star followed by the number one on your telephone keypad. Your first question comes from the line of Drew Crum with Stifel. Your line is open. Okay, thanks. Hey, guys. Good afternoon. You know, on the last call, as it relates to POS, I think you indicated that POS in the second half would outpace the first half, 3Q flat-ish, 4Q, if I heard you correctly, you're suggesting it will outpace shipment growth. With that in mind, can you still achieve that second half POS goal? I have a follow-up. Yeah, this is Anthony. I'll start. I mean, as we, you know, look ahead, you know, we expect, you know, fourth quarter POS, you know, to accelerate and to, you know, outpace, shipping. I mean, obviously, we're working closely with our retail partners to meet the anticipated acceleration. I mean, there's a number of, you know, reasons, and demand drivers that are out there. We have increased advertising support in the fourth quarter, more promotional activity with our retailers. We have more shelf space and greater representation in toy lists. A lot of reasons to believe, and our expectation is that POS will accelerate. I'd also add that quarter to date, POS is in line with expectations, and we are pleased with our performance. Also worth noting that shoppers are returning to traditional purchasing patterns, closer to the holiday season. We expect to see POS accelerating, and outpace shipments. Got it. Okay. Thanks, guys. Just as a follow-up, you know, you mentioned in your preamble an acceleration in ordering by the domestic retailers during 2Q. Was there anything else to explain the divergence between the North American performance and international performance on gross billings during 3Q? Thanks. Yeah. There in the U.S., there were certain categories that performed disproportionately well, where we traditionally underindex specifically plush and trading cards. But you know, I wouldn't take the quarter in isolation. I wouldn't look at it in isolation. Year to date, we're up 12%. In the third quarter and year to date, we were the number one company in the U.S. overall. You know, we've been number one in the U.S. for 28 consecutive years. We're also number one in our leader category, and our power brands are each number one in their respective categories. We're very confident about our success in North America and believe we are well-positioned to continue the growth trajectory. Okay. Got it. Thanks, guys. Your next question comes from the line of Eric Handler with MKM Partners. Your line is open. Good afternoon, and thank you for the question. Wondered if you could talk a little bit more about sort of the state of retail, particularly in North America right now. You know, you're seeing increased market volatility. Does that mean are retailers cutting back on orders at all? Are they reducing the amount of days inventory being held at stores? Just can you give some perspective on what's going on, particularly also as you look at the various platforms, maybe, you know, mass merchant versus dollar stores versus online platforms? I have a follow-up. Yeah. So there's no secret that there is a volatile environment and macroeconomic challenges that could affect consumer demand. You know, with all of that, the toy industry has historically demonstrated its resilience during challenging economic times. It has grown year to date. It's expected to grow for the full year. According to NPD, they continue to expect the toy industry to grow at 5.5% CAGR through 2026. You know, we're seeing the industry continue to demonstrate strong fundamentals. According to our own internal research, we expect consumers to spend the same or more this coming Christmas or the holiday season relative to last year. We are seeing purposeful brands and quality toys resonating with consumers, now more than ever. We believe, you know, that important big brands, quality product will end up winning the season. This is what we're focused on. This is where we excel. As Anthony mentioned, we do have, you know, we have more advertising and promotion in the quarter, more shelf space, better representation on the holiday toy list, and in-stock inventory. We believe we are well-positioned for the coming season and continue to grow next year, in 2023, both top line and bottom line. Okay. The follow-up for Anthony. I imagine it's been a little frustrating waiting for the investment grade credit rating upgrade. Can you sort of give us an update on where that stands? What sort of the credit ratings may be waiting on? Once you do get that upgrade, what are some of the immediate things you could sort of do because of that? Yeah, I think the first comment to make is we continue to make really good progress in improving our balance sheet and our leverage ratio. We finished Q3 at 2.3 x debt to adjusted EBITDA, and that's down from 2.8 x in the prior year. If you recall our capital allocation priorities, the first one was to invest in organic growth, and the second was to, you know, get our leverage down and maintain a target range of 2-2.5 x. We've done that. Look, as we look at an investment grade, you know, rating, it is an important milestone, you know, for Mattel. With that stronger balance sheet, you know, we will have the flexibility to consider, you know, other priorities such as M&A and share repurchases. We continue to make progress, and we continue with our dialogue with the rating agencies and continue to deliver against, you know, improving that balance sheet and reducing leverage. Eric, just to add to Anthony's comments, as we said on the note, we do see our balance sheet and capital structure becoming another growth lever. We've been very focused on bringing it to a good place. We're very much within our target range and continue to improve it. We also talked about repaying another $250 million notes before the end of the year. Continue to strengthen our position and turning our balance sheet into another lever of growth. Much appreciated, Ynon Kreiz. Thanks. Thank you. Your next question comes from the line of Linda Bolton Weiser with D.A. Davidson. Your line is open. Barbie, I think you had said before that it was kind of like the higher price point, like the Dreamhouse type items which were most impacted. Is that still the case, or is there something else that has spread a little bit more in terms of the weakness in Barbie? Linda, it's Richard. You know, you cut out on the first part of the question, but I did catch the second part, which might sum it up. I'll answer it from a Barbie perspective in total. Look, we're very confident in Barbie's long-term growth trajectory. Clearly, you know, she's the number one global doll property. We continue to execute in line with our playbook. Year to date, Barbie gross billings were up 3% in constant currency, which again is an excellent achievement when we compare it to 2021, which, as you recall, is the highest year on record. As expected, you know, Barbie did see a modest decline in the third quarter, and more specifically on higher price point items like the Dreamhouse, which you mentioned and which we shared last quarter. The brand, however, continues to be on the forefront of cultural conversation. Incredibly successful initiatives ranging from inspiring women, such as Jane Goodall. We drove the biggest style trend in fashion recently with the Barbie core trend. We're obviously looking forward to 2023. We've got a great strong innovation pipeline. We've got continued expansion of brand experiences. By the way, this is across multiple platforms. This includes a new slate of content with Netflix, as well as the highly anticipated Barbie theatrical movie release for next summer. It's also, I think, important to note, you know, Barbie has doubled in size over the past five years and was the number one global toy property overall for the last two years, which speaks to the strength of the brand. Okay, sticking with dolls for a minute. In terms of your Monster High sell-in, your shipments into the channel, in terms of what was planned for the second half, what percentage of that was like roughly done in the third quarter, and then like what percentage would be done in the fourth quarter in terms of the sell-in? Yeah, Linda, we can't share the percentages, but what I can tell you is that we're incredibly happy and encouraged with the performance that we've had to date on the relaunch of Monster High. As you know, we've launched it with a live action television musical movie which premiered this month. It was also the number one kids and family movie on Paramount+ during the week of its launch. We reached over four million total viewers on linear Nickelodeon networks. Following actually this strong performance, we've just greenlit the sequel. We've also got 26 episodes of Monster High animated series, which is gonna launch on Friday, October 28 on Nickelodeon. Of course, just in time for Halloween. We've got the new kid targeted product that's hitting shelves, which will coincide with the content releases. As I mentioned, it's really off to a spectacular start. We've also been nurturing and developing the brand with our collector community, which has been incredibly loyal. We've done multiple drops on Mattel Creations, which has been selling out in literally minutes. We're very happy. We're looking forward to the continued rollout of Monster High in North America this year and also internationally in 2023. Can I just sneak in one more? Do you guys have a target for your own inventory balance roughly at the end of the year? Yeah, I think as we look at our inventory level and, you know, we finished the third quarter up $230 million to 27%, and, you know, we're making improvements sequentially. Q2 was up $360 million or 44%, and we expect that trend to continue and improve through the balance of the year and believe that our year-end inventories will be modestly above prior year levels. Thank you very much. You're welcome. Thank you. Thank you, Linda. Thanks, Linda. Your next question comes from the line of Megan Alexander with JP Morgan. Your line is open. Hi, good afternoon. Thanks for taking our question. You know, maybe just a quick follow-up on Drew's question earlier. Can you maybe clarify what's implied in the 4Q guide from a POS standpoint? You know, Ynon, you said quarter to date's in line with expectations, so does that mean it's accelerated versus 3Q and it's positive now, or are you expecting a further acceleration from here? I think it makes a lot of sense that consumers are shifting their spending back to more traditional patterns, but you've also, you know, highlighted increased volatility multiple times. Just trying to reconcile, you know, what maybe sounds like more caution on the consumer spending outlook with an expectation that POS accelerates from here. Yeah, look, it's I think a little early to talk about, you know, quarter to date POS performance in any detail. What we did say is that we expect POS to accelerate in the fourth quarter and outpace shipping. Remember, that's in the context of what Ynon mentioned about shoppers returning to traditional, you know, buying patterns where they buy closer to the holiday season. And as we also mentioned, you know, there's many reasons to believe that POS is gonna accelerate based on advertising, promotional activity, shelf space, and the circulars and toy lists that are out there. Again, we're very confident in the statement about POS accelerating in the fourth quarter. Okay, that's helpful. Maybe, you know, a question on 2023. You talked about, you know, expecting top line and bottom line growth. Can you spend a little bit of time just talking about maybe some of the puts and takes on the margins? Like, are you seeing costs sequentially improve and, you know, should we anticipate that gross margin that's a tailwind to gross margin in 2023 and gross margin can be up in 2023 if sales are up? You know, on the SG&A side, you do still have cost savings there and, you know, other levers to pull if the top line comes in a bit weaker than you'd previously expected. Yeah. Let me make a couple of comments with respect to 2023. Again, we're gonna provide guidance on our fourth quarter call. In terms of, you know, inflation, you know, you saw in the P&L it did have a fairly significant impact in Q3, 330 basis points. You know, we are seeing some improvement in market prices for ocean freight, for materials, you know, continuing pressure on wage rates. As we've said before, overall, we expect, you know, inflation to moderate as we go into 2023. I think it's premature to talk about our overall, you know, gross margin. Additionally, you know, as we look at next year, it's shaping up well. You know, we've got the global rollout of Monster High. We've got Disney Princess and Frozen, Universal Trolls, and the Barbie movie. Again, a lot to be, you know, a lot of positive drivers on the top line and again, moderating inflation in the middle of the P&L. Great. Thank you very much. Just to add to that, as you know, also, as we said, you know, we do expect to grow the top and bottom line next year. Thanks, Anthony. Your next question comes from the line of Arpine Kocharian with UBS. Your line is open. Hi. Thank you. Thanks for taking my question. Could we go back to Barbie for a second? There is a lot of skepticism around whether Barbie can grow next year. I guess, what are your thoughts around that? You obviously have never had such a big box office event for the brand. At the same time, it's not animation, it's live action, which can be a bit tricky. I know it's very early at this point, but as you think about the brand and what's in store for 2023, do you see that growing from this really sort of record levels? Yeah, Arpine, thank you for the question. You know, as I said, we're incredibly confident in Barbie for, I mean, a whole list of reasons, but in particular, the last five years of proof. You know, doubling in size over the last five years is quite an achievement. We've got strong innovation. We've got Netflix slates. We've got franchise initiatives, and we've got probably the highest anticipated Barbie movie theatrical release next summer. Look, all things considered, we are incredibly confident in the long-term growth trajectory of Barbie. It's been the reigning number one doll of all time. Again, the performance that we've had consistently gives us the confidence as we move forward. We've got an extraordinary team. As you know, our category structure complements our overall doll performance. You know, we've got category management, which allows our brands collectively to have a unique reason for being. As a result, we're confident that all our brands can thrive together. We've got, you know, an incredible portfolio, Monster High, which of course is rolling out now with great excitement. We've got the return of Disney Princess and Frozen franchises. We've got the addition of Universal Trolls, as well, again, as the premiere of Barbie movie. Look, all in all, we couldn't be more excited about what the future holds in the doll space and in particular, Barbie as the leading fashion doll and global doll property of all time. Great. Thanks. Most of my questions on margin have been answered. I was hoping you could talk a little bit on Monster High and kind of sizing that opportunity back in the day. This was a, you know, significant brand, certainly north of $500 million and very high margin. What are your targets after that sort of initial launch as a kind of a more near-term goal, thinking about sort of next twelve months, 2023 versus, you know, what this could be in two years or three years? Well, look, again, Monster High is an incredible property within Mattel's treasure trove of properties. We've taken a very strategic approach to the relaunch of the brand. As you know, we started with our Mattel Creations collector drops, which have been going on throughout the year to extraordinary fanfare and sellouts. We then have coordinated and partnered with Nickelodeon and Viacom to create a compelling live action television musical movie, which of course premiered earlier this month and did incredibly well. We've got the 26 episodes, which I mentioned as well, dropping on Friday the 28th. We've got a really robust, innovative pipeline of product that's gonna be hitting the marketplace. As well, as mentioned, you know, North America has just started. We've got incrementality for 2023 as it rolls out throughout the world. While we're not gonna size the business itself, it is a significant opportunity, certainly in our portfolio and will be a top 10 property overall in the fashion doll ranking. Thank you very much. Your next question comes from the line of Andrew Uerkwitz with Jefferies. Your line is open. Hey, thank you for letting the new guy ask a couple of questions. I apologize if these are too simplistic, but could you quantify a little bit of the different pieces that kind of in that inflation headwind, as far as what's the biggest pieces, smallest pieces, please? Thank you. Sure. I can do that. As you saw in our 2023, the negative impact of inflation was 330 basis points is 410 basis points year to date. There's three primary drivers. The most significant impact is the increase in ocean freight rates that we incurred in this year. Again, that's the primary factor. Then to a lesser extent and about equal proportions, an increase in materials, primarily resins and zinc, and the balance being an increase in labor costs in our key supply chain markets. Got it. That's helpful. Thank you. Just one other one kind of on the entertainment side. Are you guys able to kind of quantify whether internally or what you could share with us, like the impact of some of these initiatives around entertainment? You know, if it hits a certain target, it represents X improvement in sales, or is it, or is a lot of these things just more around just kind of customer awareness brand, you know, brand awareness strategies when I think about the multiple entertainment properties you now have? Yeah. Thanks, Andrew. What we've said before is that we see the opportunity to capture the full value of our IP as accretive to what we do on the toy side. We view these opportunities as areas where we can achieve growth and develop business units that are profitable and will contribute meaningfully to our sales and business overall. Of course, there will be a halo effect on toy sales, but the opportunity is to build accretive businesses that will be successful in and of themselves. We haven't broken down the various components. What we've said that we believe in success, this could be meaningful. When we talk about these areas, it includes content, consumer product and digital experiences. The content, it includes film and television, where we have a robust slate. On film, it's more, you know, one project in production as you know, and four in development that we've announced with more coming. On the television side, we have this year 12 series and specials that will be on air, including eight new projects, and the list goes on and on. There's a lot of activity, still early days, but we are putting the building blocks, assembling a very strong leadership team on that side of the business and seeing real traction. Got it. No, I appreciate it. Thank you guys so much. Thank you. Your next question comes from the line of Fred Wightman with Wolfe Research. Your line is open. Hey guys. I just wanted to dig into the gross margin guidance. I think that you guys called out what sounds like some higher promo spend in the fourth quarter, but then also FX. Is there any way that you can sort of split out those two in the, what looks like a, I'm gonna call it 50 basis point update for gross margin? Yeah, I can address that. You know, the updated guidance for gross margin that you saw, you know, approximately, you know, 47% compared to our prior guidance of 47%-48%. Again, ticking down just a bit. The primary factor is the financial impact of managing inventory, you know, through the balance of the year. The FX impact is more to EBITDA and EPS because it's not really affecting the margin in the current period, so that translation impact doesn't affect gross margin percent, although it does affect gross margin and EBITDA dollars flowing through. Again, the primary change here is that financial impact of managing inventory. Makes sense. If we just think about the 23 targets and the decision to remove them sort of holistically, I think you guys introduced those back in early 2021, and I know that they've been updated a few times since then. Can you just sort of frame what you guys are looking for over the next eight weeks, you know, against a backdrop of targets that have been out there for almost two years? Is it really just a matter of POS and sell-through is gonna sort of be the big moving swing factor? Is it promos? Like what is sort of the big thing that you're waiting for? Yeah, I think the biggest issue is, you know, we are seeing a challenging macroeconomic environment. You know, consumers under pressure, that's manifesting itself in much higher volatility in the market. It makes it very difficult, you know, to forecast. We also, as you know, we revised our 2022 outlook, so the base has moved around a little bit, right? Coupled with the increased volatility, it's just causing us to step back and reevaluate those 2023 expectations. We'll, you know, get through, you know, Q4, we'll see how we, you know, come out, and then we'll provide guidance for 2023, you know, when we get to our fourth quarter earnings call. You know, that being said, you know, we are, you know, confident and, you know, not only continuing to grow the top and bottom line this year, but continuing that trajectory next year, with again, delivering top and bottom line growth. Perfect. Thank you. Thanks. Thanks. Fred, just to add and repeat some of the things that we said, you know, 2023 is shaping up well. We have some very distinct drivers that we talked about in aggregate. We mentioned Monster High, the global rollout, the return of Disney Princess and Frozen franchises. That's a big, you know, a big event, a big driver that, you know, is important to highlight, which is going to be, you know, a key addition to our portfolio and other properties such as Trolls that will be added to what we're doing. You know, the Barbie movie, which, while not animated, we still expect to drive significant halo for the Barbie brand. We have some. On top of what we do organically, we have these unique additions, you know, distinct additions to our business next year. Thank you. Your final question comes from the line of Gerrick Johnson with BMO Capital Markets. Your line is open. Great. Thank you. Can you just talk about the incremental pressure on gross margin coming from managing higher inventory levels? Just talk about that. What are you doing to manage higher inventory levels? Where are the higher inventory levels? You know, I noticed that your sales allowances as a percent of gross sales were actually lower year-over-year, so it doesn't look like you're managing in the third quarter. What are those inventories that need to be managed and how? Yeah. Thanks, Gerrick, for the question. Let me address this by talking, you know, comprehensively about the inventory, you know, situation, 'cause that's how it arises. You know, on our prior calls, you know, we did talk about, you know, the fact that we accelerated production to improve service levels and to reduce supply chain risk. At the same time, retailers also increased re-inventory levels to meet expected growth and demand and ahead of the holiday season to reduce risk. Reflecting our strategy, you know, own inventory levels at the end of Q3 are up $230 million. That's a 27% increase. That position has improved meaningfully relative to last quarter when we were up $360 million or 44%. As I said earlier, we expect that trend to continue to improve. The inventory is current and of good quality. As we assess the situation today and recognizing increased marketplace challenges and volatility, inventory levels are elevated. As we manage through the balance of the year, we now expect increased discounts and promotions. These will have a negative impact on Q4 margins, and this is what we've factored into our guidance. Perfect. Thank you. You're welcome. There are no further questions at this time. I will now turn the call back over to the Chairman and CEO, Mr. Kreiz. Thank you, operator, and thank you everyone for your questions today. In summary, this was a good quarter in the midst of a challenging macroeconomic environment. We believe our fundamentals are strong, and we're very confident about our multi-year growth trajectory. As we said in the prepared remarks, our strategy is working, and we are operating as an IP-driven, high-performing toy company. We look forward to the holiday season and believe we're on track to achieve another growth year for Mattel. Thank you again and appreciate your interest in the company. Now I'm gonna turn it over back to Dave. Thank you, Ynon, and thank you everyone for joining the call today. The replay of this call will be available via webcast beginning at about 8:30 P.M. Eastern Time today. The webcast link can be found in the Events and Presentation section of our Investors section of the corporate website, corporate.mattel.com. Thank you for participating in today's call. This concludes today's conference call. You may now disconnect.