Investment Thesis
Mattel demonstrates solid financial health with strong liquidity (2.15x current ratio), excellent cash generation (554.3M FCF), and healthy profitability margins (48.7% gross, 7.4% net). However, revenue contraction (-0.6% YoY) combined with a significant 26.6% decline in net income signals deteriorating operational momentum that warrants cautious positioning.
MAT Strengths
- Robust free cash flow generation of $554.3M (10.4% FCF margin) supporting capital allocation flexibility
- Strong balance sheet with $1.2B cash, 2.15x current ratio, and 18.2x interest coverage indicating low financial distress risk
- Solid profitability structure with 48.7% gross margin and 17.8% ROE demonstrating operational efficiency
- Manageable leverage at 1.04x debt-to-equity with significant debt servicing capacity
MAT Risks
- Revenue decline of 0.6% YoY combined with 26.6% net income drop suggests operational challenges or margin compression beyond top-line weakness
- Diluted EPS fell 21.5% YoY despite modest revenue decline, indicating disproportionate earnings deterioration requiring investigation
- Toy and entertainment sector vulnerability to consumer discretionary spending cycles and shifting consumer preferences
- Operating margin of 10.2% is modest for consumer goods, limiting downside protection if headwinds intensify
Key Metrics to Watch
- Revenue growth trajectory and segment performance in next quarters to confirm stabilization or continued contraction
- Net margin recovery path and identification of specific cost drivers behind the 26.6% earnings decline
- Free cash flow sustainability and whether operating cash flow remains resilient despite earnings pressure
- Gross margin trends to determine if decline is pricing-driven or reflects input cost/mix challenges
MAT Financial Metrics
MAT Profitability Ratios
MAT Balance Sheet & Liquidity
MAT 5-Year Financial Trend
5-Year Trend Summary: MATTEL INC /DE/'s revenue has remained relatively flat over the 5-year period, with a 0% decline. The most recent EPS of $0.60 reflects profitable operations.
MAT Growth Metrics (YoY)
MAT Quarterly Performance
| Quarter | Revenue | Net Income | EPS |
|---|---|---|---|
| Q3 2025 | $1.7B | -$28.3M | $0.88 |
| Q2 2025 | $1.0B | $13.0M | $0.04 |
| Q1 2025 | $809.5M | -$28.3M | $-0.08 |
| Q3 2024 | $1.8B | $27.2M | $0.19 |
| Q2 2024 | $1.1B | $27.2M | $0.08 |
| Q1 2024 | $809.5M | -$28.3M | $-0.08 |
| Q3 2023 | $1.8B | $21.5M | $0.19 |
| Q2 2023 | $1.1B | $21.5M | $0.08 |
Data sourced from SEC EDGAR 10-Q quarterly filings. Figures may represent quarterly or cumulative values.
MAT Capital Allocation
MAT SEC Filings
Access official SEC EDGAR filings for MATTEL INC /DE/ (CIK: 0000063276)