Good afternoon. My name is Abby, and I will be your Conference Operator today. At this time, I would like to welcome everyone to the Mattel, Inc. Q1 2023 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 during this time, simply press star followed by the number 1 on your telephone keypad. If you would like to withdraw your question, again, press star 1 on your telephone keypad. Thank you. Mr. David Zbojniewicz, Vice President of Investor Relations, you may begin your conference. 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 2023 Q1 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 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. For today's presentation, references to POS and consumer demand exclude the impact related to our Russia business, given our decision to pause all shipments into Russia in 2022. Our 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. We describe some of these uncertainties in the Risk Factors section of our 2022 annual report on Form 10-K, our earnings release and presentation, 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 Q1 2023 earnings call. As anticipated, our Q1 results were negatively impacted by elevated retail inventory levels. That said, the underlying business performed well, both in absolute and relative terms, with overall growth in consumer demand for our product and market share gains for Mattel. Looking at key financial metrics for the Q1 as compared to last year, net sales declined 22% as reported or 21% in constant currency, and Adjusted EBITDA declined $166 million to a negative $14 million. Our Q1 decline was primarily due to the negative impact from retailers managing inventory levels, which were elevated entering the year, and also due to the comparison to the year-ago quarter, which benefited from retailers building earlier in the season. Excluding Russia for comparability, total company POS was up mid-single digits, with double-digit growth in our international segment and flat POS in North America. Per Circana, formerly known as The NPD Group, Mattel gained share globally in our three leader categories, as well as in action figures and building sets. These broad-based market share gains speak to the strength of our portfolio. We believe retailers will continue to adjust inventories in the Q2, negatively impacting gross billings, and that the situation will be corrected by the end of the H1. Reflecting our strong financial position and confidence in our strategy, we resumed share repurchases in the quarter and look to make further repurchases this year. The fundamentals of our business are strong. We expect to outpace the industry, gain market share, and achieve our full year guidance. Looking at gross billings in the quarter, all categories declined as a result of retailers managing elevated inventory levels, with the exception of vehicles, which was up. With respect to the Power Brands, Barbie and Fisher-Price declined while Hot Wheels grew. The global rollout of Monster High and the launch of our Disney Princess and Frozen products are both off to a good start. POS significantly outpaced gross billings by double digits in all categories and all Power Brands. We have been successfully executing our strategy to grow Mattel's IP-driven toy business and expand our entertainment offering. On the toy side of the company, we recently announced a new and separate licensing agreement for Disney's Wish, releasing in November of this year, the relaunch of Barney and our first-ever licensing agreement with Hasbro to create co-branded toys and games. We launched last weekend a new line of Disney The Little Mermaid dolls as part of our Disney license agreement ahead of the upcoming theatrical release. We also made progress in capturing value for our IP outside the toy aisle and recently announced the Hot Wheels: Ultimate Challenge primetime show on NBC and the Barbie Dreamhouse Challenge, a new home makeover competition series on HGTV, both airing this summer. The Hot Wheels: Rift Rally mixed reality racing game on PlayStation and iOS, a new Monster High Live tour, the launch of our own publishing business, and a new multiyear apparel and accessories partnership with Gap. Excitement continues to build for the Barbie movie, one of the most anticipated films of the year, which premieres worldwide on July 21st. The second teaser was released earlier this month with significant global coverage. Expect more momentum in social media and marketing activities to accelerate towards the release of the movie. In closing, while retail inventory management impacted the Q1 results, the underlying business continued to perform well with overall positive consumer demand for our product and growth in market share. We believe the retail inventory situation will be corrected by the end of the H1 and anticipate a return to shipping patterns more aligned with historical trends in the H2. Overall consumer demand for our product is off to a good start, and we expect to achieve our full year guidance. Our balance sheet is in a strong position and provides the flexibility to support growth. We are well-positioned to continue executing our multiyear strategy and create long-term shareholder value. Now I will turn the call over to Anthony. Thanks, Ynon. As Ynon said, our Q1 results were negatively impacted by movements in retail inventory levels. The Q1's decline was primarily due to the negative impact from retailers managing inventory levels, which were elevated entering the year and also due to the comparison to the year-ago quarter, which benefited from retailers building earlier in the season. Q1 results were slightly ahead of the outlook we provided in mid-March, driven by the favorable timing of shipments at quarter end. Net sales of $815 million declined 22% or 21% in constant currency compared to the prior year. However, we saw positive POS performance in both absolute and relative terms, which grew mid-single digits in the quarter and significantly outpaced gross billings. Mattel outperformed the industry and gained market share. As a reminder, POS and consumer demand exclude the impact related to our Russia business. Adjusted Gross Margin declined 660 basis points to 40% due to several factors, including inventory management costs and the negative scale impact associated with the sales decline. Adjusted Operating Income declined by $177 million to a negative $87 million, primarily due to the lower sales and lower Adjusted Gross Margin. Adjusted EPS was a negative $0.24 compared to a positive $0.08 a year ago. Adjusted EBITDA declined by $166 million to a negative $14 million. We expect consumer demand to be positive for the full year and revenue comparisons to improve through the year as shipping patterns revert to historical trends in the H2. Turning to gross billings in constant currency, performance across categories was primarily impacted by movements in retailer inventory levels that had an outsized impact on a seasonally small quarter. Gross billings declined 21%, including a negative 3-point impact from Russia, there was overall positive consumer demand for our products as POS increased mid-single digits. Dolls declined 22%, primarily due to declines in Barbie, partly offset by growth in Monster High and Disney Princess and Frozen. POS for dolls increased low single digits. Barbie POS was down high single digits, but significantly better than shipping, which declined 40%. POS and shipping for Barbie were also impacted by the shift of promotions into Q2 to better align with the theatrical release of the movie. Mattel gained over 350 basis points of market share in the dolls category in Q1, and Barbie was the number one doll property globally per Circana. Vehicles grew 1% with POS up low double digits. Growth was primarily driven by Hot Wheels die-cast vehicles. Mattel gained over 530 basis points of market share in the vehicles category, achieving the highest Q1 market share on record per Circana. Infant, toddler, and preschool declined 26%, while POS was down low double digits. POS declines in baby gear as we optimized the offering were partly offset by growth in Little People and Imaginext. Mattel was the number one toy company globally in the infant, toddler, preschool category and gained 60 basis points of market share in the quarter per Circana. Challenger categories in aggregate declined 38%, primarily due to lower sales in action figures as we lapped the theatrical tie-ins in the prior year. POS was up low double digits. With respect to regional performance, North America declined at 27%, reflecting the retail inventory headwinds. POS was flat compared to last year. Per Circana, Mattel gained market share in North America in Q1. EMEA declined 24%, including a negative 12-point impact from Russia and also reflecting the retail inventory headwinds. POS increased double digits. Latin America grew 1%. POS increased double digits. Per Circana, Mattel gained market share in Latin America in Q1, extending our number one market position. Asia-Pacific increased 17%, driven by growth in all key markets. POS declined mid-single digits primarily due to China. As previously noted, retail inventory levels at year-end were above the prior year and elevated heading into 2023. This position improved in the Q1, with levels ending slightly below the prior year in both dollars and weeks of supply. While improved, quarter-end retail inventories remain slightly elevated, which is expected to negatively impact our Q2 Gross Billings as retailers continue to adjust their position. Adjusted Gross Margin declined 660 basis points to 40% in the quarter. The decline was due to several factors. Inventory management primarily closed out sales and obsolescence of 420 basis points, cost inflation of 210 basis points, fixed cost absorption of 140 basis points associated with lower volume, and mix and other factors of 140 basis points. These negative factors were partly offset by price increases, primarily the carryover benefit from 2022 actions, which contributed 120 basis points and savings from the Optimizing for Growth program, which had a positive impact of 120 basis points. Moving down the P&L, advertising expenses increased 3% to $76 million, supporting POS growth in the quarter. Adjusted SG&A increased 5% to $336 million, primarily due to market-related pay increases, partly offset by savings from the Optimizing for Growth program. Adjusted operating income was a negative $87 million compared to a positive $90 million a year ago. The decline was due to lower sales and lower Adjusted Gross Margin. Adjusted EBITDA declined by $166 million to -$14 million impacted by the same factors. Cash from operations was a use of $206 million, reflecting the seasonality of the business compared to a use of $144 million in the prior year. The increased use of cash was due to lower net earnings, partly offset by reduced working capital requirements. Capital expenditures were $43 million compared to $36 million a year ago, and Free Cash Flow was a use of $249 million compared to a use of $180 million in the Q1 of 2022. On a trailing 12 month basis, we generated $187 million in Free Cash Flow compared to $226 million in the prior year. The decline was primarily due to capital expenditures, which increased $42 million to $193 million. With positive Free Cash Flow, a strong financial position and confidence in our outlook, we have resumed share repurchases. In the Q1, we repurchased $34 million of our shares and look to continue repurchases in 2023. Taking a look at the balance sheet. We finished the quarter with a cash balance of $462 million compared to $537 million in the prior year. The decline reflects the use of cash to reduce debt and repurchase shares, mostly offset by Free Cash Flow generated over the trailing 12 months. Total debt declined to $2,327 million from $2,572 million last year, reflecting the repayment of $250 million of debt in the Q4 last year. Account receivable declined by $188 million to $674 million, in line with the decline in sales. Inventory was $961 million, slightly down from the prior year of $969 million as we have continued to achieve sequential improvements in year-over-year levels. Looking ahead, we believe we are well positioned to achieve inventory reductions in 2023, which will contribute to Free Cash Flow generation. Leverage Ratio increased to 2.9x at the end of the Q1 compared to 2.4x a year ago. The increase is primarily due to the timing of our quarterly results. We expect to end 2023 with a Leverage Ratio of approximately 2.5 times. We generated $21 million of savings in the quarter as we continue to execute the Optimizing for Growth program launched in 2021. As previously announced, we raised our program savings goal to $300 million by 2023. We are confident that we will achieve that target. We expect incremental savings of $96 million in 2023. We now expect total estimated cash expenditures to implement the program to be $155 million-$185 million, a slight increase from our prior estimate. We are reiterating our full year 2023 guidance consistent with our February investor presentation. This includes our expectation for net sales to be comparable to last year in constant currency, Adjusted EPS in the range of $1.10-$1.20, Adjusted EBITDA of $900 million-$950 million, and for Free Cash Flow to exceed $400 million. In terms of phasing, we expect Gross Billings in the Q2 to be negatively impacted by retailers continuing to manage their inventory and for shipments in the H2 to revert to historical trends. This will result in an accelerated growth rate, particularly in Q4, as we wrap an atypical inventory decline in the prior year. We are operating in a challenging macroeconomic environment with higher volatility 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. In closing, we're off to a good start with overall growth in consumer demand for our product and market share gains, and believe we are well positioned to achieve our full year guidance. Now I will turn it over to the operator. At this time, I would like to remind everyone, in order to ask a question, press star one on your telephone keypad. We'll pause for just a moment to compile the question and answer roster. Your first question comes from the line of Drew Crum from Stifel. Your line is open. Okay, thanks. Hey, guys. Good afternoon. Anthony, I think, you know, earlier in the year you suggested that working through excessive retail inventory would shave 3 to 4 points of growth from sales this year. How is the business tracking to that target? How much of that was recognized or absorbed during 1Q and what remains? I have a follow-up. Okay. You know, we are generally, you know, on track with respect to retail inventory reductions and, you know, believe the situation will be corrected by the end of the H1. Just for, you know, more, you know, context, you know, as we said on our Q4 call, retail inventory levels at year-end were above prior year and elevated as we headed into 2023. That position improved in Q1, and we ended Q1 with levels slightly below the prior year. That's both in dollars and weeks of supply. Right? They're still a little bit elevated, and we believe retailers will continue to adjust inventories in the Q2, and that situation will be corrected, you know, by the end of the H1. Maybe for Ynon or Richard. You know, I know you guys are only 1 quarter in, but can you comment on the allocation of shelf space for your existing legacy doll brands now that you've launched or relaunched rather Monster High, and you've added back Disney Princess and Frozen. Are you finding that there's cannibalization or that everything can coexist together? Thanks. Yeah, I'll start. First of all, on our space allocation, we're generally flat in comparison. You know, our category management structure allows each one of our brands to have a really unique reason for being. We've talked a lot about it in the context of the differentiation on each one of our brands. You know, the brands themselves within portfolio, particularly in the doll category, as you've mentioned, have held up well. Barbie POS held up very well in a very competitive category, which has seen, you know, a significant amount of discounting from competitors. Overall, just to simply answer the question in terms of space, we feel very confident as we move into the back half. Certainly, our doll portfolio is the strongest in the industry, and arguably in the history of Mattel. As I've said often, this is the year of the doll. Drew, just to add one comment. The flat is on a like-for-like basis, but we do obviously have more capacity for Monster High and Disney Princess, so there was no cannibalization between these brands and what we already have in the system. Got it. Okay. Thanks, guys. Your next question comes from the line of Arpine Kocharyan from UBS. Your line is open. Hi. Thank you very much. Good afternoon. This is Arpine. you know, I was wondering if you could share, maybe what demand patterns you're seeing globally into April. I was wondering if your POS is actually adjusted for Easter, the up mid-single digit that you reported, because, you know, Easter fell a little bit earlier this year versus last year. Then I have a quick follow-up. Yeah. Hi, Arpine. I think the best way to think about, you know, POS, into April, obviously, we're up in Q1. When you look at year to date, including early April, you know, we're also positive, right? I think that's the best way to look at it. Perfect. No, that's very helpful. Thank you. You know, earlier in the year, I think you had said that net sales cadence could return to that 30%-35% in the H1 and then 65%-70% in the H2. Is that still the expectation? Does that still hold? If so, that would still imply, you know, Q2 down about maybe 18%-20%. Am I thinking about it the right way and then the back half's up mid-teens or something? Yeah. Very, very much so. If you look at the, you know, the decade leading into 2021, on average, we do about one-third in the H1 and two-thirds in the H2. The anomaly was really in 2022, where we did 42% in the H1 and 58% in the H2. We're wrapping that, and that's what's causing this H1, H2, you know, growth variances. Okay. Okay. Thank you. I apologize for a third question, but I'm hoping you could shed some light on this because I think there's a lot of sort of opinions out there. Kind of if you could give us some color on consumer product mix at retail for each of your Power Brands, and particularly for Barbie. Obviously, you're making a big push here with the film coming up. How should we think about the economics of that maybe, in terms of participating in consumer products outside of the toy aisle, kind of royalty rate? Anything you could share. I'm sure you can't, you know, maybe might not be able to share a royalty rate that you earn on those third-party revenues. Anything you could give to help us think about these opportunities that you'll be announcing. Example was obviously Gap that you just announced recently. Sure. Thank you. You know, first off, you know, 2023 in particular is gonna be a legacy-making year, particularly on the Barbie brand. As we have all seen, you know, this first-ever live action film has got an incredible cultural conversation. From there, it's a catalyst to also drive meaningful extensions of the brand outside of the toy aisle, as we've shared. We've accelerated our presence in scripted and unscripted television. We have live experiences now that are taking place all over the world. Mobile gaming has also expanded, digital collectibles and of course, as you mentioned, consumer product partnerships. We've shared some of the consumer product partnerships recently, but you're gonna be hearing a lot more in the coming weeks around significant and meaningful partnerships outside of the toy aisle. It really is a catalyst for us to extend the investment thesis of unlocking the value of our IP. Movie and content and digital gaming and extensions really give us the opportunity to broaden our reach, drive revenue, monetize the brand as a franchise, and you'll be hearing much more about the impact of that in the future. In terms of accretion, these are all margin accretive opportunities. CP or the licensing opportunities, that Richard mentioned are all margin accretive. Thank you very much. Your next question comes from the line of Eric Handler from ROTH MKM. Your line is open. Thank you. Thank you very much for the question. Appreciate it. Good afternoon to everyone. Two questions. First, you know, as we look at the expected cadence for the year, and Anthony, I appreciate what you've given so far. As you look at the back half, some years, 3Q was larger than 4Q, some years 4Q was larger than 3Q. I know we're looking for a big sort of hockey stick growth in the Q4, but directionally, which of those quarters do you expect to be bigger? Yeah, I think, you know, a couple of points. First, you know, to start with the, you know, the year-ago comp certainly eased as we progressed through the year, right? That's more so for Q4 than, you know, Q3. You know, as we said, we do expect shipments in the H2 to revert to historical patterns. That is two-thirds in the back half. What you'll see is an accelerated growth rate in Gross Billings, particularly in Q4 as we wrap an atypical, you know, seasonal shipping in the prior year, right? I think it's important to note that that accelerated growth rate in Gross Billings is not dependent on accelerated POS growth. 'Cause even if you assume stable POS, you'll get a double-digit increase in Gross Billings in Q4 by, you know, simply returning to those historical patterns. Okay. All right, I'll follow up again with the rest of that. One for Richard. I feel like every quarter I'm asking about, you know, how Hot Wheels remains so strong. When you look at the growth that you achieved in Hot Wheels, is it a function of, you know, you've got really good low price items for this retail environment, or is it the product extensions that you've had? Is there anything you could sort of point to that suggests why Hot Wheels just continues to perform so well? Yeah. Well, thanks for the question. You know, there really is kind of an all-encompassing strategy in Hot Wheels that follows the Mattel playbook. Truthfully, it's been driven by, you know, innovation, specifically, you know, incredible innovation product across the brand, cultural relevance, which continues to be a really important part of the brand's narrative. We're seeing the results of it. I mean, the growth is primarily driven by die-cast vehicles. We gained over 530 basis points of market share in the vehicles category. Obviously, that's been led by the power of Hot Wheels. We're in our 5th consecutive biggest year ever, heading to our 6th consecutive record year. We also continue to expand, you know, the distribution of our core die-cast vehicles aggressively. We've been targeting both kids and adult collectors, which is primarily a growth engine within the brand itself. As I mentioned, innovation is core to the Hot Wheels growth strategy. We've, you know, launched 2 specific segments last year in 2022, Hot Wheels RC and Hot Wheels Skate. Both have been successful entries in gaining momentum. We're gonna be expanding into even more additional play patterns this fall. Look, all in all, between our demand creation that's very effective, innovation that's, you know, driving new segmentation and great excitement and cultural relevance, we can't be more excited about the growth ahead for the Hot Wheels brand. Eric, just to remind you that we also have two movies in development, one for Hot Wheels with J.J. Abrams to produce at Warner Brothers and Matchbox with Skydance, the producer of Top Gun and the Mission: Impossible series. Expect more in this category, as Richard said, very exciting space for us. Thank you. Your next question comes from the line of Gerrick Johnson from BMO Capital Markets. Your line is open. Great. Thank you. Hey, Anthony, sort of a technical question on the clearing of retail inventories. Where does that hit? I would have thought the sales allowances, but those looked pretty much flat, flattish. What is it that impacts Gross Margin to bring it down 420 basis points accounting-wise? Yeah, sure, Gerrick. I mean, you're right. Our Q1 sales adjustments were fairly comparable, you know, to the prior year. Where we're seeing the impact, you know, on our gross margin is through, you know, closeout sales, as well as, obsolescence. You know, neither of which go through sales adjustments, but obviously impact our gross margin. Yeah. Maybe for Richard or Steve, the POS growth, you know, there's 2 ways to interpret that, either as strength or as an area where you're seeing more closeouts. I understand, you know, we're seeing strength in Hot Wheels, but where are some other areas where that POS is strength, and where are some areas where that POS is just clearing a lot of closeouts? Well, you know, overall, you know, consumer demand for our products was positive, both in the Q1 and year to date, including early April. The, you know, expectation as we move forward is that that will only accelerate in the context of our products and programs and certainly as we enter into the H2. As we said, we're reiterating our full year guidance, and we expect, certainly, you know, Gross Billings in the Q2 to continue to be negatively impacted by the retailers continuing their inventory and retail inventory situations. That will be course-corrected by the end of the H1. With continued POS momentum, we'll start to see some great results in the back half. Yeah. Just to add to Richard's point, when we look at, you know, consumer takeaway, we're not seeing in aggregate any significant increase in the level of discounting, you know, overall. Obviously, that could vary, you know, by category. When we look at, you know, fixed dollars or scanned dollars, the aggregate change is relatively consistent. Okay. Well, maybe let me ask more. In action figures, building sets, games and other, what drove that POS growth? A lot of that was driven by action figures, primarily, Jurassic World. Okay. All right. Thank you very much. Okay. Sorry. Go ahead. Go ahead, Richard. That's what I was gonna say as we sort of look at the, challenger categories, in particular, you know, construction with MEGA has been led by Pokémon and the extensions that we've driven into that category with Hot Wheels and Barbie, continues to gain momentum as well. Anthony kind of reiterated the action figure comment. Noted. Great. Thanks, guys. Thanks, Garrett. Your next question comes from the line of Linda Bolton Weiser from D.A. Davidson. Your line is open. Thank you. I was curious why you think the international POS growth was so much higher than in the US. Secondly, sorry if I missed this, but did you say something about shipments being particularly strong toward the end of the quarter? Because I know, Anthony, that you said something about revenue decline being even higher than it ended up being like earlier in March at a conference. Was it that the last two weeks of March were really strong in terms of shipments? Thank you. Yeah. Start with the second part of the question. You know, relative to the expectations we provided in March, right? Our supply chain performed very well. We were able to fulfill incremental shipments at the end of the quarter, it's really just a shift between Q1 and Q2. It doesn't impact our full year outlook in terms of, you know, sales. You know, in terms of the other part of your question, you know, when we look across our, you know, regions, I think the question is around, you know, POS, and, you know, EMEA had, you know, strong POS. They were up low double digits. You know, Latin America was also up, you know, low double digits. You know, while North America, you know, was flat. I think in terms of North America, it's important to recognize, you know, that we actually outpaced the industry and gained share. Okay. Thank you. Your next question comes from the line of Stephen Laszczyk from Goldman Sachs. Your line is open. Hey. Great. Thanks. Maybe for Anthony. Could you remind us maybe to what degree fixed cost absorption is expected to be a headwind this year and, you know, to what degree that could be an opportunity as business patterns normalize both in the back half of this year and, you know, into 2024? Yeah. Let me answer that in the context of the, you know, the full year, you know, Gross Margin outlook. You know, we expect Gross Margin to, you know, improve to 47% compared to 45.9%, you know, last year. The key drivers of that on the positive side, you know, pricing, that's primarily the carryover impact of 2022 actions as well as cost savings. We increased our target under our Optimizing for Growth program, those two are partly offset, right, you know, by the fixed cost absorption impact associated with lower planned production volumes. You know, we are targeting, you know, to reduce our own inventory levels, and that is having a one-time negative impact on Gross Margin in, you know, 2023. To your point, you know, there should be upside in 2024 on that, on that factor. Also in terms of cost inflation, you know, we now expect cost inflation, you know, to be neutral, you know, to our full year 2023 guidance, and that's a little better than our original expectation. That's being offset by higher inventory management costs. Got it. That's helpful. Then just on buybacks, you repurchased $34 million in stock in the Q1. I was wondering if that quarterly pace is something that investors should expect going forward, or do you see the opportunity to maybe ramp up buybacks as the balance sheet delivers into the back half of the year? Look, we're very happy to be in the position to resume the, you know, the share buyback program. You know, that's the first time in 9 years that we've bought our own stock and really is a reflection of, you know, our ability to generate free cash flow, you know, our financial position and confidence in our, in our outlook. In terms of looking ahead, you know, we do expect to make further repurchases in 2023. We haven't given specific guidance That being said, we have $169 million remaining under our current authorization. Great. Thank you. Your next question comes from the line of Jason Haas from Bank of America. Your line is open. Hey, good afternoon, and thanks for taking my questions. The first one just on POS in 1Q, you called out the up mid-single digits. I'm curious, was that in line with your initial plan or did it come in above? What are you expecting for POS growth in the remainder of year here? Yeah. Starting with the, you know, full year in the context of our guidance, we are expecting positive POS, you know, performance. In our full year guidance we had the negative one-time impact related to retail inventory corrections. That's 3-4 points. That's in there. I would say we're kinda, you know, on track in the Q1. You know, we outpaced the industry, and gained market share. Off to a good start. Great. Thank you. This one's also for you, for the inventory clearance or inventory management headwind to gross margin, is that expected to continue? Should we see another headwind in 2Q or are we past that now? I think we'll see some headwind, but certainly less than the level we saw in Q1. Just important to note that we're gonna wrap in Q4, right, negative costs that we had in 2022. It should be a good guide to margin when we get to the back half. Makes sense. Thank you. You're welcome. Your final question comes from the line of Fred Wightman from Wolfe Research. Your line is open. Hey, guys. I just wanted to come back to Barbie. I mean, if we look at the bookings in the quarter, down 40%, they were down 30% last quarter. I think you said POS this quarter was down high single digits. Do you feel like the brand is well positioned to make the most of the upcoming movie launch or not? Look, we are incredibly confident and excited about Barbie's future. You know, we are obviously in a current dynamic where we were impacted in the Q1 by elevated retail inventory. We also, you know, remind you that the shift of promotional activity has moved into the Q2, which aligns better with the theatrical release of the movie. In Q2, we are expecting a much better performance compared to Q1, and we're really confident that we're gonna continue to gain momentum in the back half and grow in the full year. You know, it's also important to recognize Barbie's part of our dolls portfolio, which continues to be, you know, leading portfolio in the industry where we gained 350 basis points of market share in the Q1. We've got extraordinary innovation that's lined up as always for the back half. The cultural conversation around Barbie is only highlighting the importance of the brand, and the age extension that we have as well, both, you know, in our core consumer and young adults, as we pursue the collector strategy as well. There, there's a lot more energy that you will see behind the Barbie brand, certainly as we move into the back half. We couldn't be more confident and excited about the brand's future. Just embedded in your POS outlook for the year, are you still expecting the industry to be flat to slightly positive or has that changed? Yeah, no change in our estimate, regarding the industry flat to slightly up. We believe the toy industry is a growth industry. We expect it will continue to grow over time. You know, industry has shown resilience and consistency, you know, consistent growth for more than a decade now, including during challenging economic times. You know, we're seeing the industry also having cultural impact with eight toyetic movies in 2023 alone, led by the Barbie movie, but other movies as well. We're seeing toys and play remaining a significant part of life for children and families. We believe that, while there's still some macroeconomic challenges facing consumers, the industry will be flat to slightly up. Perfect. Thank you. This concludes our question and answer session. Mr. Ynon Kreiz, Chairman and Chief Executive Officer, I turn the call back over to you. Thank you, operator, and thank you everyone for your questions. In summary, while retail inventory management impacted the Q1's results, the underlying business performed well and our fundamentals are strong. We expect consumer demand to be positive for the full year, that we will outpace the industry, gain market share, and achieve our full year guidance. On a personal note, our call today coincides with my fifth anniversary as CEO of Mattel. I would like to thank the entire global organization for working together during this time to transform Mattel into an IP driven, high performing toy company. It continues to be a privilege to work with such a talented team, and I look forward to many opportunities ahead, for the company and doing more great things together. Thank you again for joining the call today, now I'll turn the call back over to Dave. Thank you, Ynon, and congratulations on your 5 year anniversary. Thank you for everyone joining the call today. The replay of this call will be available via webcast beginning at 8:30 P.M. Eastern Time today. The webcast link can be found in the Events and Presentation section of our Investors section of our corporate website, corporate.mattel.com. Thank you for participating in today's call. This concludes today's call.