Mattel’s fourth quarter results failed to meet Wall Street’s expectations, leading to a significant negative reaction from the market. Management attributed the shortfall primarily to weaker-than-expected December sales in the U.S. and a more promotional retail environment, which pressured margins. CEO Ynon Kreiz explained, “growth in the US was less than anticipated, which impacted our full year results relative to expectations,” and described U.S. trade dynamics as a key challenge. International sales, however, performed in line with expectations, showing resilience across regions.
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Mattel (MAT) Q4 CY2025 Highlights:
- Revenue: $1.77 billion vs analyst estimates of $1.83 billion (7.3% year-on-year growth, 3.7% miss)
- Adjusted EPS: $0.39 vs analyst expectations of $0.55 (28.8% miss)
- Adjusted EBITDA: $234.2 million vs analyst estimates of $316.7 million (13.3% margin, 26.1% miss)
- Adjusted EPS guidance for the upcoming financial year 2026 is $1.24 at the midpoint, missing analyst estimates by 29.6%
- Operating Margin: 9.1%, in line with the same quarter last year
- Market Capitalization: $5.12 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Mattel’s Q4 Earnings Call
- Arpine Kocharyan (UBS): Asked about the drivers of flat to modest underlying growth and the impact of digital investments. CEO Ynon Kreiz explained the strategic rationale for digital and entertainment investments, emphasizing flexibility and ROI-focused spending.
- Eric Handler (Roth Capital): Inquired about the timing and process behind the Mattel 163 acquisition. Kreiz highlighted the deal’s strategic importance for scaling digital, noting the acquisition’s immediate accretive impact and its alignment with the brand-centric strategy.
- James Hardiman (Citi): Probed the December U.S. sales shortfall and whether 2026 guidance includes inventory “cleanup.” CFO Paul Ruh explained that higher promotions reduced margins but left Mattel and its partners well-positioned inventory-wise for 2026.
- Kylie Cohu (Jefferies): Asked about consumer trends for lower-priced products and retailer inventory health. Ruh noted increased price sensitivity among consumers and more cautious inventory management by retailers, trends factored into guidance.
- Megan Clapp (Morgan Stanley): Queried the sustainability of higher SG&A and whether digital investments will structurally raise the cost base. Ruh clarified that investments are expected to become self-funding, supporting accelerated growth beyond 2026.
Catalysts in Upcoming Quarters
The StockStory team will be watching (1) progress in scaling Mattel’s digital gaming output and the integration of Mattel 163, (2) the performance and consumer response to new entertainment releases like Masters of the Universe, and (3) evidence of stabilization or improvement in U.S. retail trends, especially within key toy categories. Additionally, the effectiveness of cost-saving measures and returns on strategic investments will be important markers of execution.
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