Mattel (MAT) Up 5.2% Since Last Earnings Report: Can It Continue?

It has been about a month since the last earnings report for Mattel (MAT). Shares have added about 5.2% in that time frame, outperforming the S&P 500.Will the recent positive trend continue leading up to its next earnings release, or is Mattel due for a pullback? Well, first let's take a quick look at the most recent earnings report in order to get a better handle on the recent drivers for Mattel, Inc. before we dive into how investors and analysts have reacted as of late.Mattel Q2 Earnings Surpass Estimates, Revenues Decline Y/YMattel, reported second-quarter 2025 results, with earnings beating the Zacks Consensus Estimate and revenues missing the same. The top line fell year over year, while the bottom line came in line with the prior-year quarter’s figure.Mattel delivered a resilient second-quarter performance, underscoring its focus on operational execution amid a challenging macroeconomic backdrop. The company achieved significant gross margin expansion, international growth and continued momentum in its entertainment slate. While global trade dynamics and shifts in retailer ordering patterns weighed on its U.S. business, adjusted earnings per share (EPS) held steady year over year.Strength in Action Figures and Vehicles, along with increased point-of-sale activity and ongoing share repurchases, reflected underlying brand momentum. With a strong balance sheet and continued investment in technology and strategic partnerships, Mattel remains well-positioned to drive long-term shareholder value.Mattel’s Q2 Earnings & Sales DiscussionMAT reported an adjusted EPS of 19 cents, beating the Zacks Consensus Estimate of 16 cents. It reported an adjusted EPS of 19 cents in the prior-year quarter.Net sales amounted to $1.02 billion, missing the consensus estimate of $1.06 billion by 3.8%. The top line declined 6% on a reported and constant currency (cc) basis year over year.Net sales in the North America segment declined 16% year over year on a reported basis and at cc. The International segment’s net sales increased 7% year over year on a reported basis and at cc.In the North America segment, gross billings declined 15% (as reported and at cc) year over year. This downside was attributed to a fall in Dolls as well as Infant, Toddler and Preschool.Gross billings in the International segment increased 9% year over year on a reported basis and 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 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 declined 4% year over year on a reported basis and at cc to $1.15 billion. The gross billings for Barbie witnessed a fall of 25% year over year on a reported basis and at cc.Gross billings for Hot Wheels increased 9% on a reported basis and at cc, year over year. On the other hand, gross billings for Fisher-Price declined 21% on a reported basis and 20% at cc year over year. Gross billings at Other increased 3% and 2% on a reported basis and at cc, respectively, year over year.Mattel’s Q2 Operating ResultsDuring the second quarter, Mattel’s adjusted gross margin was 51.2%, up 200 basis points year over year. The company’s gross margin improvement was largely driven by savings from Optimizing for Profitable Growth program, lower inventory management costs and favorable mix. However, this was partially offset by cost inflation.Adjusted EBITDA during the quarter was $169.9 million compared with $170.8 million in the prior-year quarter.Balance Sheet of MATAs of June 30, 2025, MAT’s cash and cash equivalents were $870.5 million compared with $722.4 million as of June 30, 2024. Total inventories at the end of the quarter were $867.9 million compared with $776.9 million in the prior-year quarter.Long-term debt (as of June 30, 2025) was $1.73 billion compared with $2.33 billion as of June 30, 2024. Shareholders’ equity was $2.17 billion at the end of the quarter.How Have Estimates Been Moving Since Then?It turns out, estimates revision have trended downward during the past month.The consensus estimate has shifted -5.69% due to these changes.VGM ScoresAt this time, Mattel has a subpar Growth Score of D, a score with the same score on the momentum front. However, the stock has a grade of A on the value side, putting it in the top quintile for this investment strategy.Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.OutlookEstimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Interestingly, Mattel has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.One Big Gain, Every Trading DayTo help you take full advantage of this market, you’re invited to access every stock recommendation in all our private portfolios - for just $1.Zacks private portfolio services that closed 256 double and triple-digit winners in 2024 alone. That’s about one big gain every day the market was open. Of course, not all our picks are winners, but members have seen recent gains as high as +627% +1,340%, and +1,708%.Imagine how much you could profit with a steady stream of real-time picks from all our services that cover a number of strategies to suit a variety of investing and trading styles.See Stocks Now >>Want 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 ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks