Mattel Q3 Earnings and Revenues Lag Estimates, Stock Down

Mattel, Inc. MAT reported lower-than-expected third-quarter 2025 results, with both earnings and revenues missing the Zacks Consensus Estimate. The top line and bottom line also fell year over year from the prior-year quarter’s figure. Following the results, shares of MAT have moved down 6.8% in the after-hours trading yesterday. 
  
Mattel delivered a soft performance in the third quarter, likely impacted by global trade dynamics, shifting retailer ordering patterns across the industry, and ongoing uncertainty surrounding tariff conditions. Key segments such as Barbie and Fisher-Price continued to face headwinds, resulting in lower gross billings. Despite these challenges, point-of-sale (POS) momentum remains positive both in the U.S. and international markets. The company has reiterated its full-year guidance for 2025.

Mattel is advancing strategic initiatives to address current challenges and drive growth. The company has adopted a brand-centric organizational structure, integrating marketing to strengthen global brand management. It launched two strong-performing lines: Mattel Brick Shop (building sets) and Hot Wheels Speed Snap Track System (vehicles). And maintaining strong collaboration with its retail partners to navigate the current trade environment.

Mattel achieved notable international growth, continued momentum across its entertainment slate, and a collaboration with OpenAI. Strong performance in Action Figures and Hot Wheels, along with ongoing share repurchases, underscores the company’s brand strength and consumer demand. Supported by a solid balance sheet, strategic licensing partnerships, and an expanding portfolio, Mattel remains confident in delivering long-term shareholder value for the remainder of 2025.

Mattel’s Q3 Earnings & Sales Discussion

MAT reported an adjusted EPS of 89 cents, missing the Zacks Consensus Estimate of $1.05 per share. It reported an adjusted EPS of $1.14 in the prior-year quarter.

Mattel, Inc. Price, Consensus and EPS Surprise

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

Net sales amounted to $1.74 billion, missing the consensus estimate of $1.81 billion by 4.1%. The top line declined 6% on a reported basis and was down 7% on a constant currency (cc) basis year over year.

Net sales in the North America segment declined 12% year over year on a reported basis and at cc. The International segment’s net sales increased 3% year over year on a reported basis, but were flat at cc.

In the North America segment, gross billings declined 11% (as reported and 10% at cc) year over year. This downside was attributed to a fall in Dolls, Infant, Toddler and Preschool as well as vehicles. 

Gross billings in the International segment increased 5% year over year on a reported basis and up 2% at cc. The uptick was primarily driven by a rise in gross billings in the EMEA 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 declined 4% year over year on a reported basis and 5% at cc to $1.97 billion. The gross billings for Barbie witnessed a fall of 17% year over year on a reported basis and 18% at cc.

Gross billings for Hot Wheels increased 8% on a reported basis and 6% at cc, year over year. On the other hand, gross billings for Fisher-Price declined 19% on a reported basis and 20% at cc year over year. Gross billings at Other increased 2% on a reported basis, year over year.

Mattel’s Q3 Operating Results

During the third quarter, Mattel’s adjusted gross margin was 50.2%, down 290 basis points year over year. The decrease was primarily attributed to unfavorable foreign exchange impacts, inflationary pressures, increased tariff costs, and higher sales adjustments. These factors were partially offset by ongoing cost-saving initiatives.

Adjusted EBITDA during the quarter was $466.1 million compared with $584.4 million in the prior-year quarter.

Balance Sheet of MAT

As of Sept. 30, 2025, MAT’s cash and cash equivalents were $691.9 million compared with $723.5 million as of Sept. 30, 2024. Total inventories at the end of the quarter were $826.6 million compared with $737.2 million in the prior-year quarter.

Long-term debt (as of Sept. 30, 2025) was $1.73 billion compared with $2.33 billion as of Sept. 30, 2024. Shareholders’ equity was $2.26 billion at the end of the quarter.

Mattel 2025 Guidance

For the year 2025, Mattel is still expecting net sales growth in the range of 1% to 3%. Adjusted EPS are projected to be in the range of $1.54 to $1.66 compared with $1.62 reported in fiscal 2024.

Adjusted gross margin is expected to be approximately 50%, down from 50.9% reported in fiscal 2024.

Adjusted operating income is anticipated between $700 - $750 million compared with $738 million reported last year.

MAT’s Zacks Rank & Key Picks

Currently, Mattel carries a Zacks Rank #3 (Hold).

Some better-ranked stocks from the Consumer Discretionary sector are Norwegian Cruise Line Holdings Ltd. NCLH, Carnival Corporation & plc CCL and Hasbro, Inc. HAS.

Norwegian Cruise Line flaunts a Zacks Rank #1 (Strong Buy) at present. The company delivered a trailing four-quarter earnings surprise of 29.1%, on average. NCLH stock has declined 7.1% year to date. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for NCLH’s 2025 sales and earnings per share (EPS) indicates growth of 6% and 15.4%, respectively, from the year-ago period’s levels.

Carnival flaunts a Zacks Rank of 1 at present. The company delivered a trailing four-quarter earnings surprise of 169.8%, on average. Carnival stock has gained 20.2% year to date.

The Zacks Consensus Estimate for CCI’s 2025 sales and EPS indicates growth of 6.5% and 51.4%, respectively, from the prior-year levels.

Hasbro has a Zacks Rank of 2 at present. The company delivered a trailing four-quarter earnings surprise of 43.8%, on average. Hasbro stock has gained 33.8% year to date.

The Zacks Consensus Estimate for HAS’ 2025 sales and EPS indicates growth of 6.9% and 22.2%, respectively, from the prior-year levels.

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

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