MAT
#Always good to talk to you, <UNK>.
Look, we've been consistent on this.
We see this is our top priority right now, short of anything major, as a disruption of the business or something major on the investment front ---+ which, frankly, we don't expect at this point.
We stress tested this pretty carefully.
As we go through 2016, we feel comfortable that we can meet the targets <UNK> talked about on cash and still support the dividend.
Importantly, I've said, as we exit this year again into next year, we would expect to start to grow into a little bit more of a normative dividend yield as we improve performance.
And that's very much in our target range.
So right now, <UNK>, I don't see anything changing on the dividend.
Sure.
You know, we constantly test and gauge both our consumers and moms, and our research is continuing to show the brand's relevance.
And interest among moms and girls has been improving.
We know it's been improving as a result off of the effective marketing PR and various programs that we've been initiating.
I think we started that real initiation with our 23 new ethnicities as part of the Fashionista collection and really drove that point of difference with new choice and diversity for Barbie.
We did very well; and, more importantly, we created a lot of goodwill for the brand, encouraging us to continue down the strategic path of diversity and choice for the brand with its most recent launch, again, as you've seen.
The halo effect of this over the whole brand is something that we are watching and watching play out pretty carefully.
Retailers are very excited with the changes that they see on the line, both from a marketing perspective as well as product.
And there's a lot of product initiatives, new innovation, price/value ---+ a lot of structural execution points that we're not talking about on this call that took place with Barbie as well.
So we are feeling very good about the changes that we made and obviously executing against them at retail more effectively.
And we expect that that momentum will continue through 2016.
On your question on space, <UNK>, I think we've said before, we probably lost 15% to 20% over the course of the last 12 to 18 months.
Part of what we're seeing is enough velocity now and turn on that current shelf space that we, frankly, would expect to see this move in the other direction as we get into the fall set.
So it was significant.
And a lot of what we were able to do to offset that, I think, is pretty stellar as we came through the fourth quarter.
You bet.
Thank you.
I'll start it, then let <UNK> jump in.
Look, I don't think that was really the big factor.
I think we have felt for the last few months that we're not doing what we need to be doing to get the brand's salience up.
It's a combination of our content, the distribution of that content, and price/value.
And we've allowed price value and the total value proposition to shift.
And I think that hurt us in the quarter.
As you know, there's been a fair amount of private-label stuff out there at retail that actually competes directly with AG.
So we have restructured things as we go into 2016.
I think we feel a lot better about the line.
We've got a lower price segment we are doing.
I think Amazon, with the studio launch, will help us on the content front.
And we're going to be doing some interesting things on distribution to extend both our consumer reach as well as our availability.
So we think this is imminently fixable.
We were just a little slow off the mark this year.
There's not much I could add to what <UNK> is saying.
I think that he articulated it perfectly.
And I think the efforts that we are doing to re-energize consumer engagement through content, and in particular with this new deal with Amazon Studios, is really a very big and exciting long-term effort ---+ by the way, both for Amazon and for American Girl.
We're talking about specials and episodic content based on our brand's characters.
And the first special will be released in 2016.
So we are looking forward to energizing the brand through that, and that is one dimension, as <UNK> mentioned.
Well, I think what I ---+ I didn't mention 2016.
I see 2016 being higher than the historical, as we really want to make sure we've got the powder in our gun to, again, promote to the extent we need to to drive POS in the current year.
But I did say we think we'll get to more normal historical levels in 2017, as we look to get some operating leverage.
And we've got tailwinds in revenues, both behind our core brands and the Cars 3 movie, of incremental $350 million of sales in 2017.
So back to more historical levels in both sales adjustments and advertising in 2017.
Well, we said we should be approaching that range as early as 2017.
Yes, that's what our thought process is.
I think a major component of that is the incremental revenues that we expect to generate in 2017 from Cars 3 will put a lot of leverage on our infrastructure, as well as the continued momentum in our core brands.
And we expect to continue to gain traction in emerging markets.
So top line is part of the story, but we're also going to be leaning into costs in 2016 in the supply chain and SG&A.
And that will continue also into 2017.
I would think 2018, you'd look to Toy Story 4 which is great toyetic property.
So we see that.
And we're working on a whole bunch of other things with regard to licensing ---+ as well as, I think, it's continued emerging market growth, particularly in Asia Pac.
And I would say, <UNK>, we're working pretty closely with Disney on how to ensure we don't just have a huge spike and drop-off.
I think we have the same objective, to kind of keep momentum going in the year two.
So that's part of both of our plans.
We actually haven't rolled much of Fuhu in.
It's not a huge business at this point, so I wouldn't look to anything major there in the short-term.
It's really more of a platform that we want to build into some of our Fisher-Price and technology-driven toys.
So there will be some, which we'll illuminate on, <UNK>, but not a huge amount.
Yes, I think with regard to commodities like oil, we expect to see a benefit in resins and logistics.
And that's really a tailwind.
I think what we'll also have is, again, a headwind with regard to ---+ direct labor costs remain inflationary as well as packaging.
But overall, when you look at our gross margins, we're targeting 50%, to be around there in 2016, and that reflects additional headwinds with regard to ForEx.
But a tailwind is our aggressive cost savings programs in 2016.
So when it all mixes together, I think we're looking to again be around 50% next year.
<UNK>, it's <UNK>.
The shipments for that will be in the second and third quarter.
That will be the bulk of, obviously, the product flow.
And we believe that the aesthetic, the feature, the look, the content, the research all suggest that, while action figures and fashion dolls are out there, this will visibly look and feel different than everything else.
It will also obviously have a tremendous amount of content associated with it, defining characters and defining a real action-oriented girl proposition, which we think is really timed well with the girl-empowerment trend that's happening.
And certainly, as a new brand executed by Mattel globally, we'll get the full power of our execution skill set.
Space will be concurrent with the excitement by retailer.
So it varies by retailer, but obviously we are getting great support from retailers.
They are excited about the brand, and we believe that this is a great proposition for a long-term growth strategy in girls.
We'll probably have more to talk about that, <UNK>, at Toy Fair.
But we are looking at specialty retail and other opportunities to extend distribution.
We've done some testing and some changes this past year that were quite successful.
So we would expect to extend that.
There will probably also be some of our line that will be handled with Amazon.
So I would think you'll have a lot more availability points than we've had this year.
Operator, I think we have time for one final question.
<UNK>, it's <UNK>.
We've obviously got a lot of initiatives in play in 2016, and we believe many of them get traction.
But clearly, the emphasis is going to be on core brand momentum.
That is a paramount continuing strategy and priority for us going forward.
I think we have proven stability in most of our core brands for 2015, leading us to believe we are certainly on the right track and, in fact, can dial up some of the methodologies that have been working.
At the same time, we continue to look to stabilize Monster High and obviously regain some traction on American Girl.
Notwithstanding that, we're pretty excited about some the new licenses that we have.
I mean, clearly, the Warner Brothers relationship is becoming more and more important.
And we've got a great new girl initiative coming out.
We've got obviously the Batman v Superman, and the trilogy of movies going forward, well into 2017 and 2018.
You know, the MEGA business for us, which we haven't talked a lot about, is strong, and leveraging the platform itself, and attracting new partners.
Clearly, we are launching the Teenage Mutant Ninja Turtle license, which is going to be a terrific sleeper for us as well in a movie year.
So we know that that's going to prove itself out.
We've got some great new content partnerships that we've discussed that will both fuel core brands, as well as some new that you'll hear about at Toy Fair.
And last but not least, there's some really exciting programs in emerging markets, where we continue to grow ---+ as these statistics show ---+ but with even more fuel, if you will, to provide the right tools and the right product and the right content to help execute and grow market share in those areas.
So on balance, we believe we've got a good, robust program to significantly charge ourselves with covering that gap.
I think our mindset is Barbie is owed business, and that brand has the capability to do a lot more than it has.
We've proven it over the years.
I think people are starting to understand that it is part of pop culture.
And I think that as ---+ you know, there are always girl brands that come and go.
I think Shopkins was a great surprise, I think, in 2015.
But these girl brands tend to have bell curves, and Barbie is and has been a sustainable brand for almost 57 years.
And I think at this point we are well on our way to solidifying our positioning, expressing new marketing, innovating new product, and executing flawlessly.
So I would expect continued emphasis and growth on the Barbie brand moving forward.
I think, <UNK>, that is a good way to think about it.
We think we are pretty much in balance right now.
And you'll get some pockets, obviously, in a few international markets.
But, yes, I think shipping and POS should be tracking pretty closely.
Yes, I think that's particularly true because we're not losing shelf space; we're hopefully gaining shelf space in the fall.
So it should be much more aligned this year.
Thanks, <UNK>.
There will be a replay of this call available beginning at 8 PM Eastern <UNK>e today.
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