Company Reports

Mattel announced CEO Ynon Kreiz is departing the firm on Oct. 2. Roger Lynch, most recently CEO of Conde Nast and lead independent director of Mattel, is slated to take the helm on or before Nov. 2, 2026. Jonathan Anschell, the chief legal officer and secretary, will be interim CEO.

Mattel harvested gains from its turnaround, delivering above breakeven operating margins starting in 2019 and reaching 11.6% in 2025. However, the firm has a soft 2026 outlook, which includes 3%-6% constant-currency sales growth, and an operating margin around 10.5%-11.4%, marking a second year of margin contraction, even with a $225 million cost-saving program (2024-26) underway. Thankfully, the firm's capital-light strategy has helped control capital expenditures, supporting a double-digit operating margin while allowing for product innovation investments. Beyond 2026, we model a 12% average adjusted operating margin, as we believe full profit potential will be tempered by tactical investments to elevate brand relevance.

Mattel's second-quarter results included sales growth of 10%, to $1.125 billion, aided by global gross billings growth of 14% in vehicles and 35% in challenger segments. The adjusted operating margin contracted 600 basis points, to 3.4%, as spending on marketing and investments crimped profits.

Mattel harvested gains from its turnaround, delivering above breakeven operating margins starting in 2019 and reaching 11.6% in 2025. However, the firm has a soft 2026 outlook, which includes 3%-6% constant-currency sales growth, and an operating margin around 10.5%-11.5%, marking a second year of margin contraction, even with a $225 million cost-saving program (2024-26) underway. Thankfully, the firm's capital-light strategy has helped control capital expenditures, supporting a double-digit operating margin while allowing for product innovation investments. Beyond 2026, we model a 12% average adjusted operating margin, as we believe full profit potential will be tempered by tactical investments to elevate brand relevance.

First-quarter net sales rose 4% at Mattel, ahead of the low-single-digit decline it had anticipated. The firm printed an adjusted EPS loss of $0.20 in its seasonally smallest quarter, as costs, including tariffs, foreign exchange, and inflation, along with investments, weighed on profitability.

Mattel had harvested gains from its turnaround, delivering above breakeven operating margins starting in 2019 and reaching 11.6% in 2025. However, the firm offered a weak 2026 outlook, which includes 3%-6% constant-currency sales growth, and an operating margin around 10%-11%, marking a second year of margin contraction, even with a $225 million cost-saving program (2024-26) underway. Thankfully, the firm's capital-light strategy has helped control capital expenditures, supporting a double-digit operating margin while allowing for product innovation investments. Beyond 2026, we model a 12% average adjusted operating margin, as we believe full profit potential will be tempered by tactical investments to elevate brand relevance.

Mattel's fourth quarter saw 7% sales growth aided by vehicles (up 20%) and challenger categories (up 16%). Still, the holiday season was tough, resulting in promotions that added profit pressure on top of tariffs, leading to an adjusted operating margin contraction of 70 basis points to 9.1%.

Mattel has harvested gains from its turnaround, delivering above breakeven operating margins starting in 2019 and reaching 13.7% in 2024. While Mattel reiterated its 2025 outlook despite an evolving tariff policy, which includes 1%-3% constant-currency sales growth, we still expect modest pressure on the operating margin this year. This is even with a $200 million cost-saving program (2024-26) underway, given the cautious consumer. Thankfully, the firm's capital-light strategy has helped control capital expenditures, supporting a double-digit operating margin while allowing for product innovation investments. Beyond 2025, when we model a 13% adjusted operating margin, full profit potential could be tempered by tactical investments as well as input cost inflation.

Mattel's third-quarter sales fell 6%, to $1.7 billion, as retailers shifted from direct import to domestic ordering. On top of weak sales, costs were hurt by currency, inflation, tariffs, and promotions, leading to an adjusted operating margin of 22%, the lowest third-quarter mark since 2019.

Mattel has harvested gains from its turnaround, delivering above breakeven operating margins starting in 2019 and reaching 13.7% in 2024. While Mattel recently reinstated a 2025 outlook as visibility around tariff impact has risen, including 1%-3% sales growth, we still expect modest pressure to the operating margin this year, even with its $200 million cost-saving program (2024-26) underway considering the cautious consumer. Thankfully, the firm's capital-light strategy has helped control capital expenditures, supporting a double-digit operating margin while allowing for investment in product innovation. Beyond 2025, full profit potential could be held back by tactical investments as well as input cost inflation.

Mattel's sales fell by 6% in the second quarter, mainly due to struggles with Barbie and Fisher-Price. However, the company maintained its adjusted operating margin, which dropped only 20 basis points to 8.7%, thanks to efforts in a $200 million cost-savings plan aimed at improving profitability.

Mattel has harvested gains from its turnaround, delivering above breakeven operating margins starting in 2019 and reaching 13.7% in 2024. While Mattel pulled its 2025 outlook as a result of tariff and demand uncertainty, we still think it can deliver modestly positive sales growth, and we expect only minor pressure to the operating margin this year, aided by its $200 million cost-saving program (2024-26). Additionally, the firm's capital-light strategy has led to lower expenditures than in the past, supporting profitability while allowing for investment in product innovation. Beyond 2025, profits could be held back by tactical investments as well as input cost inflation.

Mattel's brands continue to resonate with consumers, leading to sales growth of 2%, to $827 million in first quarter. Despite minimal top-line growth and a shift in Easter out of the period, adjusted EPS improved by 2 cents, to a $0.03 loss, as cost savings helped capture profitability gains.

Mattel continues to harvest gains from its turnaround, delivering above breakeven operating margins starting in 2019 and reaching 13.7% in 2024. Despite the outlook for modestly positive sales growth, we expect Mattel to produce a flattish operating margin in 2025 even with foreign exchange headwinds, thanks to its $200 million cost-saving program (2024-26). Additionally, the firm's shift to a capital-light strategy has led to lower capital and operating expenditures than in the past, supporting profitability while allowing for investment in product innovation. However, profits could be held back by tactical investments in dolls and vehicles as well as input cost inflation.

While fourth-quarter sales growth of 2% was near our forecast, an adjusted operating margin of 9.8% was more than 200 basis points above our model. As we move into a fifth year of $5.4 billion in sales at Mattel, the cost and product structure alignment should again generate a 14% operating margin.

Mattel continues to harvest gains from its turnaround, delivering above breakeven operating margins starting in 2019 and reaching around 12% in 2023. Despite the outlook for little sales growth, we expect Mattel to produce further operating margin expansion in 2024, thanks to its $200 million cost-saving program (2024-26). Additionally, the firm's shift to a capital-light strategy has provided lower capital and operating expenditures than in the past, supporting profit growth while allowing for investment in product innovation. However, profits could be held back by tactical investments in dolls and vehicles as well as logistics and input cost inflation.

While we’ve started to see cracks in consumer demand across numerous categories, the rhetoric from narrow-moat Mattel remains promising, thanks to a resilient toy market set to decline at just a low-single-digit rate in 2024. Mattel's third-quarter net sales fell 4% to $1.8 billion, lapping Barbie movie sales in 2023 and reflecting the closure of poor-performing lines. Despite the sales decline, adjusted gross margin expanded 210 basis points to 53.1%, 300 basis point better than we forecast, as supply chain improvements and the cost-saving plan generated benefits faster than expected. This led Mattel to lift its full-year gross margin guidance from 48.5%-49% to 50%, a level not seen since 2014. Recall that 70% of the $200 million cost savings Mattel is targeting should benefit the gross margin. Partially offsetting the profit upside was Mattel’s downward nudge to its 2024 sales outlook, which is now flat to down slightly, from flat prior. This still implies a return to positive sales growth in the final period of the year.

Mattel continues to harvest gains from its turnaround, delivering above break-even operating margins starting in 2019 and reaching around 12% in 2023. Despite the expectation of little sales growth, we expect Mattel to produce further operating margin expansion in 2024, thanks to its $200 million cost-saving program (2024-26). Additionally, the firm's shift to a capital-light strategy has provided lower capital and operating expenditures than in the past (supporting profit growth while allowing for investment in product innovation), but profits could be hurt by tactical investments in dolls and vehicles as well as logistics and input cost inflation.

We do not plan any material change to our $25 per share fair value estimate for narrow-moat Mattel after considering second-quarter results and view shares as attractive. The firm clocked a second-quarter sales decline of just 1%, displaying another quarter of top-line stability, and adjusted operating margin expanded 200 basis points to 8.9%. Most stunning was the gross margin, which was up a whopping 430 basis points, with two thirds of the gain stemming from cost savings initiatives, deflation, and lower promotional spending (partially offset by higher operating expenses). Gross billings of Barbie fell 6%, lapping the film’s release last year; Hot Wheels’ billings rose 4%; and those of Fisher-Price increased 10%. We think a focus on innovation within key brands in Mattel’s portfolio has continued to steer it toward further improvements in its financial performance.

Mattel continues to harvest gains from its turnaround, delivering above break-even operating margins starting in 2019 and reaching around 12% in 2023. Despite the expectation of little sales growth, we expect Mattel to produce operating margin expansion in 2024, thanks to its $200 million cost-saving program (2024-26). Additionally, the firm's shift to a capital-light strategy has provided lower capital and operating expenditures than in the past (supporting profit growth while allowing for investment in product innovation), but profits could be hurt by tactical investments in dolls and vehicles as well as logistics and input cost inflation.