Mattel Q4 Earnings & Revenues Miss Estimates, Stock Down

Mattel, Inc. MAT reported fourth-quarter 2025 results, with earnings and revenues missing the Zacks Consensus Estimate. The top line increased year over year, while the bottom line declined from the prior-year quarter’s figure.

Following the results, the company's shares plunged 30.8% in the post-market trading session yesterday.

Negative investor sentiment was observed as management acknowledged that U.S. performance fell short of expectations, with December growth softer than anticipated. The company also cited margin and profitability pressure tied to higher discounting, inflation, foreign-exchange headwinds and inventory actions to support retailers, along with declines in certain categories such as Dolls and Infant, Toddler and Preschool. The company signaled that ongoing investments in digital games, technology and marketing are expected to pressure near-term margins.

Mattel’s Q4 Earnings & Sales Discussion

MAT reported an adjusted EPS of 39 cents, missing the Zacks Consensus Estimate of 53 cents. It reported an adjusted EPS of 35 cents in the prior-year quarter.

Net sales amounted to $1.77 billion, missing the consensus estimate of $1.84 billion. The top line increased 7% on a reported basis and 5% in constant currency (cc) basis year over year.

Mattel, Inc. Price, Consensus and EPS Surprise

Mattel, Inc. price-consensus-eps-surprise-chart | Mattel, Inc. Quote

Net sales in the North America segment increased 5% year over year on a reported basis and at cc. The International segment’s net sales increased 11% year over year on a reported basis and 5% year over year at cc.

In the North America segment, gross billings increased 7% (as reported and at cc) year over year. This upside was attributed to a rise in Dolls, Vehicles, Action Figures, Building Sets, Games and Other.

Gross billings in the International segment increased 10% year over year on a reported basis and 4% at cc. The uptick was primarily driven by a rise in gross billings in the EMEA, Latin America and Asia Pacific regions.

MAT’s Category-Wise Worldwide Sales

Mattel, through its subsidiaries, sells a broad range of toys. These items are grouped under different categories: Dolls, Infant, Toddler and Preschool, Vehicles and Action Figures, Building Sets, Games and Other.

Worldwide gross billings by Mattel Power Brands increased 8% year over year on a reported basis and 6% at cc to $2.04 billion. The gross billings for Barbie witnessed a rise of 2% year over year on a reported basis.

Gross billings for Hot Wheels increased 20% on a reported basis and 16% at cc year over year. On the other hand, gross billings for Fisher-Price increased 1% on a reported basis and declined 1% at cc year over year. Gross billings at Other increased 6% and 4% on a reported basis and at cc, respectively, year over year.

Mattel’s Q4 Operating Results

During the fourth quarter, Mattel’s adjusted gross margin was 46%, down 480 basis points year over year. The downside was attributed to higher discounts, inflation, unfavorable foreign exchange and the timing lag between mitigating actions and the recognition of tariff costs. However, this was partially offset by cost savings.

Adjusted EBITDA during the quarter was $234.2 million compared with $248.9 million reported in the prior-year quarter.

Balance Sheet of MAT

As of Dec. 31, 2025, MAT’s cash and equivalents were $1.24 billion compared with $1.39 billion as of Dec. 31, 2024. Total inventories at the end of the quarter were $563.1 million compared with $501.7 million reported in the prior-year quarter.

Long-term debt (as of Dec. 31, 2025) was $2.33 billion, almost flat year over year. Shareholders’ equity was $2.23 billion at the end of the quarter.

MAT 2025 Highlights

Net sales in 2025 amounted to $5.35 billion compared with $5.38 billion in 2024.

Net income in 2025 came in at $397.6 million compared with $541.8 million reported in 2024.

In 2025, adjusted diluted EPS came in at $1.41 compared with $1.62 reported in the previous year.

Other Business Updates

Mattel has entered into a global, multiyear licensing agreement with Paramount to develop and market a broad range of consumer products tied to the iconic Teenage Mutant Ninja Turtles franchise. Beginning in 2027, the company is set to launch action figures, playsets, vehicles, games, collectibles and role-play items across global retail channels, alongside new product lines supporting the animated sequel Teenage Mutant Ninja Turtles: Mutant Mayhem 2 in 2027 and an upcoming live-action/CG hybrid film slated for 2028. Executives from both companies highlighted the franchise’s enduring cross-generational appeal and emphasized opportunities to expand fan engagement through innovative product offerings worldwide. The agreement strengthens the longstanding collaboration between Mattel and Paramount’s Products & Experiences division, reinforcing their shared focus on scaling iconic franchises across multiple platforms and touchpoints.

Mattel has agreed to acquire the remaining 50% stake in Mattel163 from NetEase, taking full ownership of the mobile game studio in a deal valuing the business at $318 million, with $159 million payable for NetEase’s interest. The transaction is expected to close by the end of the first quarter, subject to customary conditions.

Established in 2018, Mattel163 develops mobile games based on Mattel’s IP, including Uno!, Uno Wonder, Phase 10 and Skip-Bo, and has built a base of about 20 million monthly active users and over 550 million downloads globally. Full ownership is expected to enhance the company’s in-house development, publishing and digital customer acquisition capabilities, while improving alignment with its broader product roadmap. The acquisition supports Mattel’s strategy to maximize the value of its IP across high-margin entertainment verticals, alongside its digital focus on licensing partnerships, self-publishing initiatives slated for 2026, and expansion on platforms such as Roblox and Fortnite.

MAT’s 2026 Outlook

Management expects 2026 net sales to increase in the range of 3-6% year over year. The company expects adjusted operating income to be between $550 and $600 million.

Mattel anticipates adjusted EPS to be between $1.18 and $1.30 compared with $1.41 reported in 2025. The adjusted tax rate is considered to be approximately 24%.

MAT’s Zacks Rank & Key Picks

MAT currently has a Zacks Rank #3 (Hold).

Some better-ranked stocks from the Consumer Discretionary sector are Callaway Golf Company CALY, Monarch Casino & Resort, Inc. MCRI and Rush Street Interactive, Inc. RSI.

Callaway flaunts a Zacks Rank #1 (Strong Buy) at present. The company delivered a trailing four-quarter earnings surprise of 292.2%, on average. CALY stock has surged 92.9% in the past year. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Callaway’s 2026 sales indicates a decline of 47%, while EPS indicates growth of 308.2% from the year-ago period’s levels.

Monarch Casino currently flaunts a Zacks Rank #1. The company delivered a trailing four-quarter earnings surprise of 3.5%, on average. MCRI stock has gained 16.9% in the past year.

The Zacks Consensus Estimate for Monarch Casino’s fiscal 2026 sales and EPS indicates growth of 2.4% and 10.5%, respectively, from the prior-year levels.

Rush Street has a Zacks Rank of 2 (Buy) at present. The company delivered a trailing four-quarter earnings surprise of 19%, on average. RSI stock has climbed 16.7% in the past year.

The Zacks Consensus Estimate for Rush Street’s 2026 sales and EPS indicates growth of 14.1% and 20.7%, respectively, from the prior-year levels.

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This article originally published on Zacks Investment Research (zacks.com).

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