Good afternoon. My name is Emma, and I will be your Conference operator today. At this time, I would like to welcome everyone to the Mattel, Inc. Second Quarter 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 the Star one. Thank you. David Zbojniewicz, Head of Investor Relations, you may begin your Conference. Thank you, operator. 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 second 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. We may 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 into 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. 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 Q1 2023 Quarterly Report on Form 10-Q, 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 second quarter 2023 earnings call. Mattel's second quarter financial results were in line with company expectations, but this moment in time will largely be remembered as a key milestone in our company's history. The release of our first ever theatrical movie to a global audience as part of our strategy to expand our entertainment offering and capture the full value of our IP. We will talk more about the Barbie movie shortly. Turning to financials, sales trends improved significantly from the first quarter, but were down versus the prior year. This was primarily due to the continued impact of retailers managing inventory levels and industry softness, as well as comparisons to the year ago quarter, which benefited from retailers building inventories earlier in the season. Looking at key financial metrics for the second quarter as compared to last year, net sales declined 12% as reported, or 13% in constant currency. Adjusted EBITDA declined $37 million to $148 million, and trailing twelve-month free cash flow increased by $214 million to $361 million. POS was down high single digits in the quarter and down low single digits for the first half of the year. POS continued to exceed shipping. Versus Circana, in the second quarter and year to date, Mattel gained share globally and in our 3 leader categories: dolls, vehicles, and infant, toddler, and preschool. Reflecting our strong financial position and confidence in our strategy, we continued to repurchase shares in the quarter, and we look to make further repurchases this year. Our retailers have made considerable progress in adjusting their inventories of Mattel products and are below prior year levels. While the toy industry declined more than we expected in the second quarter, we believe consumers are deferring purchases in anticipation of increased spending during the holiday season. Given first half trends, we now expect the industry to decline modestly for the year, but remain significantly above pre-pandemic levels. The fundamentals of our business are strong. We expect to outpace the industry, gain market share, and are reiterating our full year guidance. Looking at gross billings in the quarter, dolls and vehicles grew, while infant, toddler, and preschool, and our challenger categories declined. 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 Disney Princess and Disney Frozen are building momentum. We continued to successfully execute our strategy to grow Mattel's IP-driven toy business and expand our entertainment offering in the second quarter. As it relates to our toy business, we launched a wide range of Barbie movie-related toys and products. Releases to date have sold out across major distribution channels, and we will be expanding the range in the second half. We continued to expand our franchise brands with the launch of new innovative products, including Hot Wheels RacerVerse, a new character-driven play system. We renewed our multi-category licensing partnership with Warner Bros. for their portfolio, including the DC Universe, Batwheels, and Harry Potter, among others. As it relates to our entertainment business, the Barbie movie premiered globally last Friday to incredible success and became the largest opening weekend at the box office of 2023. This first production of Mattel Films brought together some of the world's most prolific filmmakers and talent of our generation. The world-class Barbie marketing organization and Mattel's broad expertise in demand creation, in strong collaboration with Warner Bros. film promotional engine and global distribution platform, have made the movie hard to ignore. The success at the box office during the first weekend, combined with positive film reviews and the entire build-up towards its release, made it more than a movie. It has become a cultural phenomenon. Exceptional media coverage and product tie-ins, cross-platform amplification from Warner Bros. Discovery Cable and streaming services, a global philanthropic campaign, and of course, a sellout toy line, significantly broadened the film's reach and fan engagement. We could not be prouder of the creative vision and execution of Greta Gerwig and are grateful for the partnership with Margot Robbie and LuckyChap Entertainment, Noah Baumbach, David Heyman, and of course, Warner Bros. commitment to the project from the very beginning. This would also not have been possible without the dedication of the Mattel Films and Barbie teams and everyone at Mattel who have been a part of the Barbie movie. This is a milestone moment for Mattel and a showcase for the cultural resonance of our IP, our ability to attract and collaborate with top creative talent, and the capabilities of our franchise management organization. This also speaks to the potential of Mattel Films and the significant progress of our strategy to capture the full value of our IP. We continue to make good progress in capturing value of our IP outside the toy aisle in other areas as well. As part of the Barbie movie, Mattel partnered with Warner Bros. and Warner Music Group to release the Barbie music album, produced by Mark Ronson. The album features a stellar lineup of some of the most celebrated music artists in the world, including Dua Lipa, Nicki Minaj, Ice Spice, Billie Eilish, Lizzo, Sam Smith, and other major global talent. Mattel also entered into over 165 consumer product partnerships tied to the Barbie movie, with cross-category displays in thousands of stores globally. In television, the Barbie Dreamhouse Challenge, a home makeover competition series hosted by Ashley Graham, premiered July 16th on HGTV to great success. The episode ranked as a top five cable premiere among women and adults 25 to 54 years old. The Hot Wheels Ultimate Challenge primetime show, which premiered on NBC and Peacock on May 30th, has performed well and ranks as a top NBC alternative series to launch on Peacock. In digital gaming, Hot Wheels Unleashed 2: Turbocharged, the upcoming sequel to the successful digital game for consoles and PC, was announced. The game will launch this fall. In live events, Mattel announced the Monster High Live Tour, also coming this fall in partnership with Family Entertainment Live. As we announced today, Richard Dickson, President and Chief Operating Officer, will step down from his position with the company effective August 3rd, 2023. I would like to thank Richard for his tremendous contributions to the company and congratulate him on his opportunity to become CEO of Gap Inc. Richard has led the growth of some of the world's most iconic and purpose-driven brands. I'm personally grateful for the friendship, the partnership, and for his work in developing and growing the best brand and franchise team in the business today. We wish Richard great success in his new role. The company has promoted Lisa McKnight to Executive Vice President and Chief Brand Officer, overseeing all of Mattel's toy categories and global brands, as well as design and development. Josh Silverman has been promoted to Executive Vice President and Chief Franchise Officer. His role has expanded to include leadership of digital gaming and licensed entertainment, in addition to his responsibilities overseeing global consumer products, publishing, promotions, and location-based entertainment businesses, as well as franchise strategy and management for Mattel. Lisa and Josh will report to me. The company has also promoted Chris Down to Executive Vice President and Chief Design Officer, reporting to Lisa. Lisa has held senior leadership positions at Mattel for nearly 25 years and has been the global head of Barbie since 2016 and dolls since 2019. In this role, she has led the charge in repositioning and scaling the Barbie brand and driven significant portfolio expansion with complementary brands. She has also led the successful relaunch of Monster High and played a key role in winning back the licensing rights to Disney Princess and Disney Frozen franchises. Josh Silverman joined Mattel in 2022 as Global Head of Consumer Products and Chief Franchise Officer, following 20 years in leadership roles with The Walt Disney Company and Marvel. Since joining Mattel, he has expanded the company's consumer products, location-based entertainment, and publishing businesses. Most notably, Josh oversaw the execution of more than 165 consumer products partnerships in retail tie-ins related to the Barbie movie. Our strong and talented leadership team and the entire brand management organization are in an excellent position to continue to execute our strategy, to grow our IP-driven toy business, and expand our entertainment offering. In closing, our second quarter financial results were in line with expectations, but it was much more than that in terms of advancing our entertainment strategy. Following the incredibly successful Barbie movie release, we look forward to continue capitalizing on the many exciting opportunities to capture the full value of our iconic brands outside the toy aisle. We expect to achieve our full-year guidance to outpace the industry and gain market share. We are well positioned to continue executing our multi-year strategy and create long-term shareholder value. Now, I will turn the call over to Anthony. Thanks, Ynon. While comparisons improved from the first quarter, our second quarter financial results were negatively impacted as retailers continued to manage inventory levels compared to the buildup in the prior year. While we gained share, we saw some overall industry softness. Net sales of $1,087 million declined 12% or 13% in constant currency compared to the prior year. Adjusted operating income was $75 million, a decline of $47 million compared to the prior year, due primarily to lower sales. Adjusted EPS was $0.10, compared to $0.18 a year ago, and adjusted EBITDA of $148 million was $37 million below the prior year. We continue to expect consumer demand for Mattel products will be positive for the full year and revenue comparisons to improve in the second half as shipping patterns revert to historical trends. Given our first half performance and outlook for the balance of the year, we are reiterating our guidance, including for net sales growth in constant currency, Adjusted EPS, and Adjusted EBITDA. Turning to Gross Billings in constant currency, first by category. Overall, Gross Billings declined 12%, including a 2-point negative impact from Russia. Our POS in the quarter, which excludes Russia, declined by high single digits. That said, we continued to significantly outpace the industry and gain market share globally. Dolls grew 9%, driven by Disney Princess and Disney Frozen, and the global rollout of Monster High, partly offset by Barbie. POS for dolls declined mid-single digits, reflecting overall declines in the category. Barbie declined 7%, with POS down low double digits. Barbie POS continued to be impacted by the shift of promotions to better align with the theatrical release of the movie. With the success of the Barbie movie and our robust marketing plans for the second half, we have seen improving trends, with Barbie's month-to-date POS in July turning positive. Mattel outperformed the industry and gained over 400 basis points of market share in the dolls category year to date, and Barbie was the number one doll property globally per Circana. Vehicles continued its strong performance, growing 10% in line with POS. Growth was primarily driven by Hot Wheels die-cast vehicles, which continued to perform well. Year to date, Mattel gained over 450 basis points of market share in the vehicles category, achieving the highest first-half share on record per Circana. Infant, toddler, and preschool declined 29%, reflecting the impact of retailer inventory movements and overall category weakness. POS was down low double digits, less than gross billings, primarily due to baby gear, as we continue to realign the business to more profitable segments. Mattel outperformed the category, gained 60 basis points of market share year to date, and was the number one toy company globally in the infant, toddler, preschool category per Circana. Challenger categories in aggregate declined 40%, due primarily to lower sales and action figures as we lapped the theatrical tie-ins in the prior year. POS declined low double digits, but ahead of gross billings. Regional performance was impacted by retail inventory headwinds in various markets, as well as some industry softness in key regions. North America gross billings declined 18%. POS declined low double digits. For the first half, per Circana, Mattel gained market share in North America. EMEA declined 8%, reflecting a negative 8 percentage point impact from Russia. POS, excluding Russia, increased high single digits. Latin America grew 3%, with POS comparable to the prior year. Per Circana, Mattel gained market share in Latin America year to date, extending our number one market position. Asia Pacific increased 7%, driven primarily by growth in China and India. POS declined low single digits. As previously discussed, retailer inventory levels were elevated heading into 2023. The position improved in the first quarter and has improved further this quarter. At the end of the second quarter, retailer inventory levels in dollars are below prior levels by a double-digit percentage, with weeks of supply declining high single digits. At this point, we believe the retail inventory correction is mostly behind us. Adjusted gross margin of 44.9% in the quarter was comparable to the prior year. There were several puts and takes to this performance. On the positive side, price increases, primarily the carryover benefit from 2022 actions, contributed 170 basis points. Savings from the Optimizing for Growth program had a positive impact of 150 basis points, and foreign exchange had a positive benefit of 90 basis points.... These positive factors were offset by cost inflation, while continuing to moderate, had a 140 basis point impact, fixed cost absorption of 100 basis points associated with lower volumes, inventory management costs, primarily closeout sales and obsolescence of 90 basis points, and mix and other factors of 80 basis points. Moving down the P&L, advertising expenses of $90 million were comparable to the prior year and up 100 basis points as a percentage of net sales. Looking ahead, we are planning for increased advertising spend in the second half. Adjusted SG&A declined 6% to $324 million, primarily driven by our cost management efforts and savings from our Optimizing for Growth program. Adjusted operating income was $75 million, compared to $121 million a year ago. The $47 million decline was due to lower sales, partly offset by lower adjusted SG&A. Adjusted EBITDA declined by $37 million to $148 million, impacted by the same factors. On a year-to-date basis, cash from operations, reflecting seasonality of the business, was a use of $326 million, compared to a use of $425 million in the prior year. The $99 million improvement was primarily driven by improved working capital performance, primarily inventories, partly offset by lower net income. Capital expenditures were $73 million, compared to $79 million a year ago, and free cash flow was a use of $399 million, compared to $503 million in the prior year. On a trailing twelve-month basis, we generated $361 million in free cash flow, compared to $147 million in the prior year, an increase of $214 million. The increase was primarily driven by cash from operations, benefiting from improved working capital performance, partly offset by higher capital expenditures supporting recent capacity additions. We have utilized a portion of our free cash flow to repurchase shares. In the first half, we repurchased $50 million of our shares and look to continue repurchases in the second half. Taking a look at the balance sheet, we finished the quarter with a cash balance of $300 million, compared to $275 million in the prior year. The increase reflects the free cash flow generated over the trailing twelve months, mostly offset by the use of cash to reduce debt and repurchase shares. Total debt declined to $2.328 billion, from $2.576 billion last year, reflecting the repayment of $250 million of debt in the fourth quarter last year. Accounts receivable declined by $98 million to $891 million, broadly in line with the decline in sales. We continue to make good progress in reducing owned inventories. Inventory was $972 million, compared to $1.178 billion in the prior year, a reduction of $206 million. Looking ahead, we are well positioned to achieve our targeted inventory reductions in 2023, which will contribute to free cash flow generation. Our leverage ratio increased to 3.1 times at the end of the second quarter, compared to 2.3 times 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 $24 million of savings in the quarter as we continue to execute the Optimizing for Growth program launched in 2021. We remain on track to achieve our program savings goal of $300 million by 2023. Total estimated cash expenditures to implement the program are expected to be $155 million-$185 million. We are reiterating our full year 2023 guidance, consistent with our first quarter earnings call. This includes our expectation for net sales to be comparable to last year in constant currency, adjusted EPS in the range of $1.10 to $1.20, adjusted EBITDA of $900 million-$950 million, and for free cash flow to exceed $400 million. We continue to expect growth in the dolls and vehicles categories, offset by declines in infant, toddler, and preschool, and in our challenger categories in aggregate. For our Power Brands, we expect Barbie and Hot Wheels to grow and for Fisher-Price to decline. At current spot rates, we expect foreign exchange translation will have a positive impact of approximately 2 percentage points on 2023 net sales. In terms of phasing and with the retailer inventory correction mostly behind us, we expect Gross Billings to return to historical trends with two-thirds of annual shipments in the second half. This will result in an accelerated growth rate, particularly in Q4, as we wrap an atypical retailer 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, Mattel's second quarter performance and first half was in line with expectations, and we believe we are well positioned to achieve our full year guidance. The balance sheet is strong and business fundamentals are sound. Retailer inventories are well positioned, and we look forward to meeting consumer demand for our products as we enter the second half of the year and the all-important holiday season. Now I will turn it over to the operator. Thank you. As a reminder, if you would like to ask a question, press star, followed by one on your telephone keypad. Your first question today comes from the line of Eric Handler with ROTH. Your line is open. Good afternoon. Thank you for the question. In looking at Barbie and trying to sort of figure out the growth trajectory for this year, I wondered if you could talk about, maybe give us some directional expectations in how much of the growth is from the toy aisle, how much is increased licensing, and then maybe, you know, give us a hint on movie economics? Yeah, I'll start. It's Richard. Clearly, on the Barbie front, we are incredibly pleased with the Barbie brand performance. I mean, the success of the Barbie movie is a milestone moment for Mattel, and it really is a showcase for the cultural resonance of the brand. As we've seen, the success is far beyond the film. We've seen POS impacted on our toy business, on our consumer product partner business, which has really begun to accelerate meaningfully. We all see the world as playing with Barbie, whether it's our toys, fashions, accessories, or content. I mean, there's no doubt that the brand has reached a new level of cultural relevance. Movie tie-ins to date have been extraordinary with a movie soundtrack, television shows. We've announced over 165 different consumer product partnerships and live experiences. All in all, it has been just a tremendous moment for the brand, and our guidance includes expectations for significant growth for Barbie in the second half and to be positive for the full year. Certainly, with the halo effect of the movie and its economics benefiting Mattel over the next several quarters and years. Ultimately, you know, we've never been more confident in Barbie and our dolls portfolio's future in both the back half, and certainly years and beyond. Okay, great. By the way, Richard, congratulations, well deserved, and good luck to you. Ynon, maybe you could talk a little bit about the big picture for, you know, what's next for the movie business. Does the success of Barbie make it easier to get other films that have been in the pipeline, maybe greenlit and, you know, starting to move forward with? I don't, I don't know how... I have no idea how far along the scripts are or, you know, where they are in the process, but, you know, maybe you could talk a little bit about how to think about that. Strike issues notwithstanding. You know, let's start by saying that from the beginning, this was not just about making a movie, this was about creating a cultural event and leverage our brands in a way that we've never done before. What we saw in this movie, with this project and the way the Barbie movie was released and received in the marketplace, it was really a showcase for the cultural resonance of our brands, the way we work, attract and collaborate with top talent, and our marketing and demand creation capabilities to create what effectively became a cultural phenomenon. This is not just about releasing a movie, but really executing our strategy at the highest level. You've been following us for a while. You know, this has been the strategy. This is what we were aiming to achieve, and it's great to see, to see it playing out in that way, you know, in real time. We're not saying that every new movie will achieve the same level of success, but we absolutely plan to execute the same strategy, the same approach, the same methodology in collaborating with top talent, in inspiring, in amplifying, in trusting and promoting top talent, and then bringing our marketing machine and demand creative capabilities to create special, iconic moments in culture. Yes, there is momentum right now overall, not just for Barbie, the brand, but for other brands. Of course, even on Barbie, you know, this is not just about one movie. The goal was to create to build a film franchise and continue to extend the brand in more ways. You know, success breeds success. We believe we're in a very good place, and hope to achieve more with Barbie and other brands. Thank you very much. Your next question comes from the line of Linda Bolton Weiser with D.A. Davidson. Your line is open. Yes, hi. I'm just curious, in terms of, this year the retailers needing to reduce inventory, did that affect the original plans for how big of a product line for Barbie related to the movie that you actually shipped into retail? I mean, was that affected by the macro situation or not versus original plan? Thanks. No, Linda, they're really two independent issues. You know, in our original, in our current guidance, we're anticipating a macro retail inventory impact of three to four percentage points. That continues to be our expectation. The movie, toy line, you know, is kind of separate from that, and, it's going very well. Okay. Can I just ask about, it seemed, when you gave the shipment and the POS data for the outside the U.S., Latin America and Asia, it seemed like the shipment growth exceeded the POS growth. I'm just curious, was that the retailers actually rebuilding inventory, or should we be concerned because the POS wasn't stronger in those markets? Thanks. We feel good about the performance, you know, internationally, you know. I think in both Latin America and Asia Pacific, they didn't start with the retailer inventory situation that the other markets did. We didn't expect to see that divergence, right? That we're seeing more in North America and EMEA, where most of that inventory correction, actually has occurred. You know, sitting here at the end of Q2, you know, we believe that the inventory correction is now mostly behind us, right? You know, this will bode well as we get into the second half with the expectation, you know, that we'll go back to those historical trends of two-thirds of growth building happening in the second half, and that'll, you know, certainly support an accelerated growth rate for us in H2. Okay. If I could just sneak in one more. In terms of the Barbie movie, I think you said that in a couple of quarters or something, if the box office was really big, you would share in the economics, and we might actually see it affect your earnings in a positive way. I guess why, given the success of the box office, why would that not be something that could make you raise your guidance for the year? Is it just not material enough? In terms of the, you know, the guidance, and as Ynon stated, you know, the second quarter results, you know, we're in line with, you know, company expectations. We are reiterating, you know, our guidance for net sales and constant currency to be comparable to 2022. As I mentioned, this includes the, you know, retail inventory headwind of 3-4 points. If you break down our guidance, you know, it implies significant growth in the second half, including, you know, for Barbie, which we expect to be positive, you know, for the full year. You know, that said, in the context of our overall portfolio, some industry softness we saw in Q2, and, you know, given it's still early in the year, we've got, you know, 2/3 of our sales still to go, we are maintaining our guidance. You know, that said, you know, we're off to a good start in Q3. Q3 quarter-to-date, POS for the total company is now positive, as well as for Barbie, and we continue to outpace the industry and to gain market share. Let me slip in a congratulations to Richard. Good luck. Thank you, Linda, very much. Your next question comes from the line of Stephen Laszczyk with Goldman Sachs. Your line is open. Hey, great. Thank you. First on Barbie, Ynon, I was wondering if the success of the Barbie movie, this past month has changed the way you look at capital allocation at all? Are there opportunities that you think make more sense today, perhaps committing more capital towards future media productions or acquiring other forms of IP that you think make more sense today, you know, than they, than they may have a few months ago? Look, at this point, we're still absorbing and amplifying the initial rollout of the movie. It's early to comment on further plans. We're not changing strategy in the near term, but, you know, as we continue to strengthen our balance sheet and drive more cash and see significant increase in cash flow, we continue to look for ways to invest in organic growth, always in the interest of our shareholders. Whatever we do will be the most prudent and impactful way, risk-adjusted strategy to amplify return for our shareholders. Got it. Maybe one for Anthony. You called out overall industry softness in your prepared remarks. I was hoping you could maybe unpack that a little bit more for us. What areas of the retail market are you seeing the most softness in? Looking ahead, I'm curious if there's anything you're hearing specifically from your retail partners that gives you confidence in achieving your top-line guidance for the year? Any commentary around that would be helpful. Yeah, as we said, you know, we are seeing some industry softness. You know, we believe that, you know, consumers are, you know, deferring some of their current purchases and intend to spend more, you know, in the second half, in the holiday season. That's why, you know, we're calling for a positive, you know, holiday season. You know, with the inventory correction now behind us, you know, we're working closely with our retailers to meet the demand, the anticipated demand for our product in the second half. We think we're in a very good position, and look forward to the holiday season. Great. Thank you. Thank you, Stephen. Your next question comes from the line of Jason Haas with Bank of America. Your line is open. Hey, good afternoon, thanks for taking my questions. It sounds like there's an incremental I think you called that a 2 percentage point benefit from FX. I guess my question is, why not raise the EPS guidance on the back of that? Is there anything that's incremental that's gonna pressure EPS that wasn't contemplated in the guidance before? Sure. Look, inside of our, you know, Gross Margin, there are always kind of puts and takes. You know, we had already anticipated some uplift from foreign exchange. Now we're, you know, we're quantifying it for you that, you know, based on current exchange rates, it's a 2-point positive to the, you know, top line. You know, there are other, you know, puts and takes. At this point, we are reiterating the guidance, which is for, you know, 47% on the year. You know, given our first half, that does imply, you know, significant Gross Margin in the second half, which will come from a number of factors. You know, continued savings on our Optimizing for Growth program, you know, the benefit of the top line. We're wrapping some one-time inventory management costs in Q4, you know, of last year. Those, you know, all kind of factored in. We feel good about, you know, where we are in the second half. That's great. Are you able to give any color on what the cadence of revenue should look like between 3Q and 4Q? Will those also follow a normal seasonality? Yeah, I think you'll see more of an acceleration in Q4, you know, as we wrap the atypical inventory decline that happened in the fourth quarter of last year. Great, thank you. If I could squeeze one more in. Just on the Barbie movie, it sounds like things are off to a really good start. There's always this big question around this movie just because it's geared towards an older audience. The question was around how well the toy sales would do alongside it. I know it's early, but is your initial, the initial read that you are seeing those incremental toy sales alongside the movie? How about from the retailers? Are they seeing the success of the movie at the box office, and are they, you know, increasing their orders for Barbie at this point? The initial take-up and movie-related products has been selling out very fast. We've said that before, in terms of the actual toy brands and over 165 retail partnerships that we've had. We've seen a very strong success of that. We haven't commented yet on Barbie classic toys, which is what is factored into our full year guidance. All in all, we're clearly seeing a halo effect of the movie. Important to say that you know, this is not just about the quarter or about the year. This is about long-term franchise management. We absolutely expect to see continued momentum with the brand on the back of such a strong initial release. What is interesting to note is that with this movie, we're seeing a real expansion in fan base, more male audience that go to the theaters. We're seeing very strong performance internationally. This is important to say because there was some commentary before the movie released that people thought it would be more successful domestically in the U.S. We're actually seeing on top of the success in the U.S., we're seeing a very strong performance internationally, and this is before Japan even release, which will happen in August. Within the movie story, there are some very important indications about the strength of the brand, the take-up and the continued expansion of the fan base and audience overall. That's great to hear. Congratulations on the success you've been having. Thank you. Your next question comes from the line of Arpine Kocharian with UBS. Your line is open. Hi, thank you. This is Arpine. This is probably a question for Ynon. you know, you are approaching peak production period, I believe, right around August. What goes into that thinking in terms of upside and downside to your plans? Buyers seem to be very cautious on inventory. At the same time, they are, in some cases, running below target in stock levels, at least in toys, yet not taking inventory. Do you see risk that some of that cautious outlook that the retailer maintains, sort of has the potential to be reflected in their purchase orders? How do you think about that? Yeah, thanks, Arpine. We continue to work collaboratively with our retail partners. This is what we do every year. This is what we do as we head towards the production season and all important holiday periods. We continue to monitor the market. We receive input and data points from retailers all over the world, from our own people on the ground in every major market, and look to continue to adjust and reflect that in how we map our plans going forward. You know, the overall, the fundamentals are strong. The portfolio is very well balanced. We're seeing strength in not just in Barbie, but we talked about Hot Wheels a lot. Hot Wheels is on track to achieve its sixth record year. We have some important incremental drivers that we haven't had in past years, including Disney Princess and Frozen, Disney's Wish, Trolls, Monster High is rolling out globally. We talked a lot about the Barbie movie, that in itself will have, you know, its own potential momentum, or expected momentum, of course, the continued strength across the portfolio. You know, we're not done. We look to continue to drive the business going forward. We just announced another partnership with Warner Bros. to grow our third-party licensing business as well. Expect to continue to outpace the industry, gain market share, and achieve our full year guidance. Thank you, and this is very helpful. Then, would you be able to size how meaningful could consumer product partnerships be for your profitability over time? I think you said more than 160 partnerships for Barbie alone. How should we think about the opportunity over time? Obviously, that can be a very high-margin business for you. Right. You said it right. It's a very high-margin business. We continue to look at the Barbie movie as a template. We think of it as a template in terms of our ability to execute such comprehensive program of consumer product partnerships. What is interesting, you know, and one of the takeaways of the success of the Barbie movie, is our ability to execute our demand creation expertise outside the toy aisle. As a company, our focus to date has been doing that, as, you know, within the toy side of the business, and now we were able to bring that expertise into amplifying the movie and turning it into a cultural event. Of course, it starts with having, you know, a great movie, you know, reflecting the creative vision and, you know, masterful execution of a great picture by Greta Gerwig. Having superstar cast with Margot Robbie and Ryan Gosling, having an amazing soundtrack that is now becoming an album and an experience in and of itself, produced by Mark Ronson. Of course, Warner Bros., in terms of their incredible marketing campaign and everything they brought to the table. It is also very much about our expertise in amplifying all of that, and turning it into a cultural event, and continuing to drive business, important business outside of our core toy expertise. Just really quickly, for Fisher-Price, what are some of the underlying reasons the brand is still under so much pressure? How much of that decline is sort of clean up to shift to more profitable SKUs and get out of, for example, baby gear, if you can quantify that quickly? Well, it's Richard. You know, first off, Mattel outperformed the category. You know, we gained 60 points, basis points of market share year to date. We are the number 1 toy company globally in the category of infant, toddler, preschool. You know, we did decline in the second quarter. It really reflects the impact of retailer inventory movements and the overall category weakness. We continue to expect trends to improve as we progress through 2023. We're supporting it by Imaginext, expanding its core audience with the release of Trolls later this year, which we're really excited about. We've got continued expansion of Little People that's gaining more and more momentum with our core brands, Barbie and Hot Wheels, which have extended into that property. We've got new, strong innovation that is planned for the back half, with great demand creation to support the brand. There's a lot in the pipeline for Fisher-Price. Of course, we believe in the brand, its position in the market, the opportunity to grow. We'll continue to optimize the categories that we're in, both in revenue, and most importantly, profitability, to extend our leadership position. Thank you. Thank you both, and congratulations on Barbie's success, and all the best to you, Richard. Thank you, Arpine. Thank you. Your next question comes from the line of Fred Wightman with Wolfe Research. Your line is open. Hey, guys. Thanks for the question. I just wanted to ask about the inventory correction timeline. It seems like that got pushed out a little bit versus what you guys were expecting last quarter. Wondering what, if anything, changed? Just how we should rationalize that with the gross margin impact that we saw. I mean, it was a pretty big sequential change in terms of what you called out that was tied to inventory closeouts. How does that all work? Sure. I would say the retail inventory situation is unfolding as we expected, right? We made some progress in Q1. We made further progress in Q2. We ended the quarter with retail inventory levels, you know, down double-digit% in dollars and a high single-digit%, as measured in weeks of, you know, supply. We certainly had less inventory management costs in Q2 than we did in Q1. As we sit here today, you know, we would say that the correction is, you know, mostly behind us. What that means looking ahead, you know, as gross billings are expected to return to normal patterns with 2/3 in the second half, you know, we should see an accelerated growth rate, particularly in Q4, as we wrap last year's movement. Okay. Then there was a comment about some of the POS impact in 2Q as far as consumer shifting spending to the holiday. What exactly is informing that view? Is it tied to survey work, or what are you sort of basing that on? It's based on our own internal research that we do every year in terms of, you know, talking to consumers and try to understand, you know, how they're thinking, why they're, you know, making purchases or not making purchases. I would also. Yeah. Sure, I would also add to that. I think the economic data also, you know, supports, you know, what we're, you know, expecting, you know, in terms of, you know, consumer spending is expected to increase in the second half. Unemployment remains low. You know, inflation seems to be subsiding, you know, and consumer sentiment, seems to be on the rise if you look at a number of indices, as well. Makes sense. All the best, Richard. Thank you so much. Your last question today comes from the line of Drew Crum with Stifel. Your line is open. Okay, thanks. Thanks for sneaking me in, and Richard, best of luck and congrats. My first question is, how does the current Hollywood labor disputes impact your business this year? Is this something that if it lingers, is more of a headwind in 2024? We, you know, it is delaying some projects that are in development, but we've made significant progress before the strike, and we expect to continue to make progress after the strike. We're watching the space and, we'll manage accordingly. Okay. Ynon, I think you responded to a question concerning the entertainment strategy and the success you've had with Barbie to date. I wanted to drill down maybe a little bit further on that. Maybe it's a little bit premature to be asking this, but given the film hasn't been in release for more than a week, what are your thoughts around what's next for Barbie theatrically? Do you intend to sequel a film? Can you do spin-offs? Can you improve your participation or economics on the next project? You know, what's next for Barbie? We haven't announced anything, it's probably a bit early to talk about sequels, but obviously, with the success of the film, with the, you know, phenomenal release, you know, less than a week, already at well north of $400 million of the box office and a very strong momentum, and, you know, as I mentioned, repeat viewing and broad demographics, very strong global performance, that would invite more opportunities. You know, we operate in an industry where everyone is looking for these moments, for these brands, for these, you know, cultural events. They happen, but they don't happen often. We're very proud to be, you know, the owner of such an important iconic brand. You know, we should remember that Barbie has been already successful before the movie, you know, the number one brand for two years in a row, globally. Last year was number two, only behind Pokémon, continuing to show strength on very strong footing. We expect the brand to continue to grow. We expect to have more opportunities in content, this is not just film, but also television and other areas where we continue to engage people who are have an emotional connection with the brand. I just want to make the point, that the biggest shift in our strategy and in our DNA was to realize that people who buy our product are not just consumers, they are fans. Once you have an audience, you the more opportunities open up to engage with your fans in many ways and continue to create value from that engagement. Expect more. Too early to talk about sequels specifically, we absolutely believe there are more opportunities to continue to extend the Barbie brand. Got it. Thanks so much. This concludes our question and answers for today. I now turn the call back to Ynon Kreiz for closing remarks. Thank you, operator, thank you everyone, again, for your questions. Always a good discussion. I would like to close by congratulating the Barbie and Mattel Films teams and the entire global organization on the milestone moment we achieved together in bringing Barbie to life for the first time on the big screen, in live action, and advance our entertainment strategy. Congratulations again to Lisa McKnight, Josh Silverman, and Chris Down on their well-deserved promotions. We look forward to their continued strong contributions to Mattel. Of course, thank you, Richard, for helping to make Mattel the company it is today. You will be missed. You're a friend. You're a personal friend to me. You're a colleague, we'll always stay friends, of course. We're gonna miss you. We wish you all the best in the new role, and thank you for everything you've done. Now I'll turn the call back to Dave. Thank you, Ynon, and thank you everyone for joining today's call. A replay of this call will be available via webcast beginning at 8:30 P.M. Eastern Time today. Webcast link can be found in the Events and Presentation section of our Investors section of our corporate website, investors.mattel.com. Thank you for participating in today's call. This concludes today's conference call. You may now disconnect.