Toy manufacturing and entertainment company (NASDAQ: MAT) fell short of the market’s revenue expectations in Q4 CY2025, but sales rose 7.3% year on year to $1.77 billion. Its non-GAAP profit of $0.39 per share was 28.8% below analysts’ consensus estimates.
Is now the time to buy Mattel? Find out by accessing our full research report, it’s free.
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: 8%, down from 9.4% in the same quarter last year
- Market Capitalization: $6.70 billion
Ynon Kreiz, Chairman and CEO of Mattel, said: “We achieved strong topline growth in the fourth quarter and consumer demand was positive in every region for both the quarter and full year, but December gross billings in the U.S. ended up growing less than expected. Our international business was positive for the year and we gained market share in key categories globally.”
Company Overview
Known for the creation of iconic toys such as Barbie and Hotwheels, Mattel (NASDAQ: MAT) is a global children's entertainment company specializing in the design and production of consumer products.
Revenue Growth
Reviewing a company’s long-term sales performance reveals insights into its quality. Any business can have short-term success, but a top-tier one grows for years. Unfortunately, Mattel’s 3.1% annualized revenue growth over the last five years was weak. This was below our standard for the consumer discretionary sector and is a poor baseline for our analysis.
We at StockStory place the most emphasis on long-term growth, but within consumer discretionary, a stretched historical view may miss a company riding a successful new product or trend. Mattel’s recent performance shows its demand has slowed as its revenue was flat over the last two years. 
This quarter, Mattel’s revenue grew by 7.3% year on year to $1.77 billion, missing Wall Street’s estimates.
Looking ahead, sell-side analysts expect revenue to grow 4.7% over the next 12 months. Although this projection implies its newer products and services will spur better top-line performance, it is still below the sector average.
Software is eating the world and there is virtually no industry left that has been untouched by it. That drives increasing demand for tools helping software developers do their jobs, whether it be monitoring critical cloud infrastructure, integrating audio and video functionality, or ensuring smooth content streaming. Click here to access a free report on our 3 favorite stocks to play this generational megatrend.
Operating Margin
Operating margin is a key measure of profitability. Think of it as net income - the bottom line - excluding the impact of taxes and interest on debt, which are less connected to business fundamentals.
Mattel’s operating margin has shrunk over the last 12 months and averaged 12.3% over the last two years. The company’s profitability was mediocre for a consumer discretionary business and shows it couldn’t pass its higher operating expenses onto its customers.
In Q4, Mattel generated an operating margin profit margin of 8%, down 1.5 percentage points year on year. This reduction is quite minuscule and indicates the company’s overall cost structure has been relatively stable.
Earnings Per Share
We track the long-term change in earnings per share (EPS) for the same reason as long-term revenue growth. Compared to revenue, however, EPS highlights whether a company’s growth is profitable.
Mattel’s EPS grew at a weak 22.1% compounded annual growth rate over the last five years. This performance was better than its flat revenue but doesn’t tell us much about its business quality because its operating margin didn’t improve.
In Q4, Mattel reported adjusted EPS of $0.39, up from $0.35 in the same quarter last year. Despite growing year on year, this print missed analysts’ estimates. Over the next 12 months, Wall Street expects Mattel’s full-year EPS of $1.44 to grow 23%.
Key Takeaways from Mattel’s Q4 Results
We struggled to find many positives in these results. Its full-year EPS guidance missed and its EBITDA fell short of Wall Street’s estimates. Overall, this was a weaker quarter. The stock traded down 8.8% to $19.21 immediately following the results.
Mattel’s earnings report left more to be desired. Let’s look forward to see if this quarter has created an opportunity to buy the stock. We think that the latest quarter is only one piece of the longer-term business quality puzzle. Quality, when combined with valuation, can help determine if the stock is a buy. We cover that in our actionable full research report which you can read here (it’s free).
