Mattel Loss Narrower Than Estimates in Q1, Revenues Surpass

Mattel, Inc. MAT reported first-quarter 2025 results, wherein the top and bottom lines surpassed the Zacks Consensus Estimate. Moreover, both metrics improved year over year.Mattel plans to raise prices on select toys in the United States as it grapples with rising costs linked to new tariffs imposed by the Trump administration on imports from China and other nations. Despite fast-tracking efforts to shift production away from China, management says price hikes are necessary to offset the impact.Due to ongoing macroeconomic volatility and shifting U.S. tariff policies, Mattel finds it challenging to forecast consumer spending and domestic sales for the rest of the year, particularly during the holiday season. As a result, the company is holding off on providing full-year 2025 guidance until it gains clearer visibility into market conditions.Mattel’s Q1 Earnings & Sales DiscussionMAT reported an adjusted loss per share of 3 cents, which was narrower than the Zacks Consensus Estimate of a loss of 11 cents. It reported an adjusted loss of 5 cents in the prior-year quarter. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)Net sales amounted to $826.6 million, which beat the consensus estimate of $800 million by 3.4%. The top line increased 2% on a reported basis and 4% in constant currency (cc) year over year.Mattel, Inc. Price, Consensus and EPS Surprise  Mattel, Inc. price-consensus-eps-surprise-chart | Mattel, Inc. QuoteNet sales in the North America segment increased 3% year over year on a reported basis and at cc. The International segment’s net sales increased 1% on a reported basis and 5% at cc year over year.In the North America segment, gross billings increased 4% (as reported and at cc) year over year. This upside was backed by growth in Dolls as well as Action Figures, Building Sets, Games and Other.Gross billings in the International segment increased 1% on a reported basis and 6% at cc year over year. The uptick was primarily due to a rise in gross billings in the EMEA and Asia Pacific regions.MAT’s Category-Wise Worldwide SalesMattel, 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 3% year over year on a reported basis (and 5% at cc) to $924.2 million. The gross billings for Barbie witnessed a fall of 2% year over year on a reported basis, but were flat at cc.Gross billings for Hot Wheels increased 4% on a reported basis and 7% at cc year over year. On the other hand, gross billings for Fisher-Price declined 3% on a reported basis and 1% at cc year over year. Gross billings at Other increased 3% and 5% on a reported basis and at cc, respectively, year over year.Mattel’s Operating ResultsDuring the first quarter, Mattel’s adjusted gross margin was 49.6%, up 130 basis points year over year. Mattel’s gross margin improvement was largely attributed to reduced costs related to inventory management, particularly in areas like product obsolescence and clearance. Additionally, the company benefited from efficiencies gained through its Optimizing for Profitable Growth initiative, though these gains were partially offset by ongoing cost inflation.Adjusted EBITDA during the quarter was $57.2 million compared with $53.5 million in the prior-year quarter.Balance Sheet of MATAs of March 31, 2025, MAT’s cash and cash equivalents were $1.24 billion compared with $1.13 billion at 2024-end. Total inventories at the end of the quarter were $658.4 million compared with $669.3 million at 2024-end.Long-term debt (as of March 31) of $2.33 billion was approximately on par with the reported value at 2024-end. Shareholders’ equity was $2.13 billion at the end of the quarter.Mattel’s Zacks RankMAT currently carries a Zacks Rank #5 (Strong Sell).Stocks to ConsiderSome better-ranked stocks from the Zacks Consumer-Discretionary sector are WW International, Inc. WW, Sportradar Group AG SRAD and American Outdoor Brands, Inc. AOUT.WW International presently sports a Zacks Rank of 1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here. WW International delivered a trailing four-quarter earnings surprise of 88.2%, on average. The stock has gained 43.9% in the past year. The consensus estimate for WW International’s 2026 EPS implies growth of 48.8% from the year-ago levels. American Outdoor currently carries a Zacks Rank #2 (Buy). The company delivered a trailing four-quarter earnings surprise of 79.6%, on average. The stock has gained 42.7% in the past year. The Zacks Consensus Estimate for American Outdoor’s fiscal 2025 sales and EPS indicates growth of 3.7% and 93.8%, respectively, from the year-ago levels.Sportradar Group presently carries a Zacks Rank #2. The consensus estimate for Sportradar Group’s 2025 sales and EPS implies growth of 15.8% and 172.7%, respectively, from the year-ago levels. Sportradar Group stock has surged 146.9% in the past year.Zacks' Research Chief Names "Stock Most Likely to Double"Our team of experts has just released the 5 stocks with the greatest probability of gaining +100% or more in the coming months. Of those 5, Director of Research Sheraz Mian highlights the one stock set to climb highest.This top pick is among the most innovative financial firms. With a fast-growing customer base (already 50+ million) and a diverse set of cutting edge solutions, this stock is poised for big gains. Of course, all our elite picks aren’t winners but this one could far surpass earlier Zacks’ Stocks Set to Double like Nano-X Imaging which shot up +129.6% in little more than 9 months.Free: See Our Top Stock And 4 Runners UpWant the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Mattel, Inc. (MAT): Free Stock Analysis Report WW International, Inc. (WW): Free Stock Analysis Report American Outdoor Brands, Inc. (AOUT): Free Stock Analysis Report Sportradar Group AG (SRAD): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks