Key Stats
- Current price: $15 (April 17, 2026)
- Full-year 2025 net sales: $5.35B, down 1% YoY
- Full-year adjusted EPS: $1.41, down from $1.62 in 2024
- Q4 2025 net sales: $1.77B, up 7% as reported
- Q4 adjusted EPS: $0.39, up from $0.35
- Full-year 2026 net sales guidance: +3% to +6% in constant currency
- Full-year 2026 adjusted EPS guidance: $1.18 to $1.30
- TIKR model price target: $22.83
- Implied upside: +50%
Mattel Stock Q4 2025 Earnings Breakdown
Mattel stock (MAT) closed out 2025 with Q4 net sales of $1.77 billion, up 7% as reported, but a softer-than-expected December in the U.S. caused full-year net sales to finish at $5.35 billion, down 1% year over year.
Vehicles were the standout driver, with Q4 gross billings up 16% and Hot Wheels delivering its eighth consecutive record year with double-digit growth for the full year.
Challenger categories collectively grew 14% in Q4, fueled by Action Figures on the back of strong Jurassic, Minecraft, and WWE performance, while UNO posted its tenth consecutive quarter of growth.
Dolls declined 7% for the full year, primarily due to Barbie and Polly Pocket, with Barbie finishing flat in Q4 after being pressured by softer category trends and headwinds from noncore segments including mini Barbie Land.
Infant, Toddler and Preschool declined 18% for the full year, primarily due to Fisher-Price, Baby Gear, and Power Wheels, reflecting the ongoing strategic exits in those lines.
CEO Ynon Kreiz framed 2025’s shortfall as a U.S.-specific distribution issue: “2025 was marked by uncertainty in U.S. trade dynamics that affected retailer ordering patterns for much of the year.”
On the capital return front, Mattel repurchased $600 million of shares in 2025 and the board authorized a new program to buy back another $1.5 billion over the next three years.
For 2026, management guided for net sales growth of 3% to 6% in constant currency, adjusted EPS of $1.18 to $1.30, and adjusted gross margin of approximately 50%.
That EPS range reflects a deliberate hit: approximately $110 million in strategic investments targeting digital games, first-party data, and breakthrough toy innovation, plus an additional $40 million primarily in digital performance marketing for two self-published mobile game launches.
The February announcement also included the acquisition of full ownership of Mattel163, the mobile games joint venture with NetEase valued at $380 million, with a purchase price of $159 million for NetEase’s 50% interest, expected to contribute approximately $150 million in partial-year revenue in 2026.
Mattel Stock Financials
The 2025 income statement tells a story of margin pressure at the top of the P&L and operating deleverage from a year where December didn’t deliver.
Full-year adjusted gross margin came in at 49%, down 200 basis points, driven by higher discounting, cost inflation, and foreign exchange headwinds.
Q4 adjusted gross margin fell more sharply to 46%, down 480 basis points, as Mattel accelerated promotional activity to manage inventory and support retail partners heading into 2026.
Full-year operating income was $620 million, a 16% decline, as gross margin compression flowed through with limited SG&A offset.
Q4 operating income dropped to $140 million, down 16.1% year over year, with an operating margin of 8% versus 10% in the year-ago quarter.
Management’s 2026 gross margin target of approximately 50% represents a recovery toward prior-year levels, supported by the Optimizing for Profitable Growth program, which generated $89 million in savings in 2025 and is tracking ahead of its three-year $200 million target.
Mattel Stock Valuation Model Take
The TIKR model prices Mattel stock at $22.83, implying 50.3% upside from the current price of $15.19 over 4.7 years, with an annualized return of 9%.
The mid-case assumptions driving that target are a revenue CAGR of 2.8% through 2035 and a net income margin of 7.4%, both conservative figures for a company managing a deliberate year of front-loaded investment spending.
The 2025 results do not weaken the investment case in the ways that would matter most: underlying POS grew approximately 3% globally, retailer inventory finished the year in a cleaner position, and the margin compression traces to known, manageable factors.
The 2026 earnings guidance cut is voluntary, not distress, and management has been explicit that the $150 million investment is designed to be self-funding and accretive starting in 2027.
At $15.19, Mattel stock is priced as if the 2027 recovery does not happen. If it does, the gap to fair value is significant.
The central tension Mattel stock creates heading into 2026: the company is voluntarily compressing near-term earnings by $150 million to fund a digital scale-up that management says turns self-funding within 12 months.
Bull Case
- Vehicles grew 10% for the full year and Hot Wheels posted its eighth consecutive record year, providing a durable revenue floor heading into 2026.
- Management guided for mid- to high single-digit revenue growth and double-digit adjusted operating income growth in 2027, a significant re-rating event if achieved.
- Mattel163, acquired for a net cash outlay of approximately $80 million after JV cash funding, generated revenue exceeding $200 million and carries high margins, making it immediately accretive on closing.
- Masters of the Universe theatrical release on June 5, 2026 and Matchbox on Apple TV in October represent two toyetic IP events with no comparable in 2025.
Bear Case
- Full-year 2026 adjusted EPS guidance of $1.18 to $1.30 is below 2025’s $1.41, meaning Mattel stock is paying investors less in earnings per share in a year the company itself called a recovery year.
- The $150 million investment thesis depends on two unproven self-published mobile games hitting measurable ROI targets in their first year of full distribution.
- Barbie declined for the full year in 2025 and management does not expect the brand to return to growth until 2027, leaving the company’s highest-profile franchise in a holding pattern for a second consecutive year.
- Q4 adjusted gross margin of 46% highlights downside sensitivity to any December 2026 repeat: a back-loaded Q4 in a promotional environment could again compress full-year results despite in-line POS.
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