Breaking Down Mattel, Inc. (MAT) Financial Health: Key Insights for Investors

Are you keeping a close eye on the financial performance of leading toy companies? Interested in understanding the key metrics that drive investment decisions? Let's dive into the financial health of a major player in the industry. In 2024, the company reported net sales of $5.38 billion, a slight decrease of 1% compared to the previous year. However, it also achieved a gross margin of 50.8%, marking an increase of 330 basis points. Furthermore, the company's operating income saw a substantial rise, reaching $694 million. Want to know how these figures stack up and what they mean for investors? Keep reading to find out!

Mattel, Inc. (MAT) Revenue Analysis

For investors eyeing Mattel, Inc. (MAT), a deep dive into the company's revenue streams is essential. Understanding where the money comes from and how those sources are trending offers critical insights into Mattel's financial health and future prospects. Here’s a breakdown of Mattel's revenue streams:

Mattel’s revenue is diversified across several key areas:

• Products: This constitutes the bulk of Mattel's income, driven by the sale of toys, games, and related merchandise.
• Services: Revenue is also generated from services such as content creation and licensing of Mattel's intellectual property.
• Geographic Regions: Mattel’s sales are spread globally, with North America being a significant market, alongside Europe, Latin America, and Asia Pacific.

Analyzing Mattel's year-over-year revenue growth rate provides a clearer picture of its performance. Recent data shows:

• In 2024, Mattel reported a 1% increase in worldwide gross billings, reaching $5.4 billion.
• North America saw a 2% increase, while International markets experienced a 1% increase.
• Gross billings for the North America segment were $2.5 billion, and International gross billings reached $2.9 billion.

A closer look at how different business segments contribute to Mattel's overall revenue highlights the importance of each area:

• Mattel Power Brands: These brands, including Barbie, Hot Wheels, and Fisher-Price, are key revenue drivers. In 2024, Barbie's gross billings increased by 17%, and Hot Wheels increased by 10%.
• Franchise Brands: Brands like Polly Pocket and Thomas & Friends also contribute significantly.
• Challenger Brands: These include brands with high growth potential.

The following table summarizes the gross billings performance of Mattel’s key brands in 2024:

Significant changes in revenue streams can signal strategic shifts or market impacts. For Mattel, key observations include:

• The Barbie movie had a significant positive impact on sales, driving substantial growth in the Barbie brand.
• Gross margin increased to 49.5%, reflecting improved profitability.
• Mattel is focused on growing its entertainment division, leveraging its intellectual property to create content that drives brand engagement and sales.

For further insights into Mattel's financial health, check out: Breaking Down Mattel, Inc. (MAT) Financial Health: Key Insights for Investors

Mattel, Inc. (MAT) Profitability Metrics

Analyzing Mattel, Inc.'s (MAT) profitability involves examining its gross profit, operating profit, and net profit margins to understand the company's financial health and efficiency. By comparing these metrics against industry averages and historical trends, investors can gain valuable insights into Mattel's ability to generate profits.

Here's a breakdown of key profitability metrics:

• Gross Profit: This is the revenue remaining after deducting the cost of goods sold (COGS). It indicates how efficiently Mattel manages its production costs.
• Operating Profit: Calculated by subtracting operating expenses (such as administrative and marketing costs) from the gross profit, this metric reflects Mattel's profitability from its core business operations before interest and taxes.
• Net Profit: This is the profit remaining after all expenses, including interest and taxes, have been deducted from revenue. It represents Mattel's bottom-line profitability.

To provide a clearer picture, let's consider some hypothetical figures based on Mattel's financial performance:

These figures are purely illustrative, to show potential trends. Actual data would be essential for a real analysis.

Several factors drive Mattel's operational efficiency:

• Cost Management: Effective control over production and operational costs directly impacts profitability.
• Gross Margin Trends: Monitoring gross margin trends helps in understanding the efficiency of production and pricing strategies.

Comparing Mattel's profitability ratios with industry averages provides context. If Mattel's margins are higher than its competitors, it indicates a stronger competitive position and efficient operations. Conversely, lower margins might signal areas needing improvement.

To further understand who is investing in Mattel and why, check out this related article: Exploring Mattel, Inc. (MAT) Investor Profile: Who’s Buying and Why?

Mattel, Inc. (MAT) Debt vs. Equity Structure

Understanding Mattel, Inc.'s financial health requires a close look at its debt and equity structure. This involves analyzing the levels of debt the company holds, how it compares to its equity, and how it manages its financing strategies.

Mattel's debt levels consist of both long-term and short-term obligations. As of December 31, 2024, Mattel's total long-term debt stood at $2.43 billion. Additionally, the company has short-term debt, which, when combined with the long-term debt, provides a comprehensive view of its total debt obligations.

The debt-to-equity ratio is a critical metric used to assess a company's financial leverage. As of December 31, 2024, Mattel's debt-to-equity ratio was approximately 2.14. This ratio indicates the proportion of debt and equity Mattel uses to finance its assets. A higher ratio suggests that the company relies more on debt, which can amplify both gains and losses. The 2.14 ratio means that Mattel has $2.14 of debt for every $1 of equity. Compared to the industry standards, it's important to note that the toy industry varies, but a debt-to-equity ratio of 1 to 1.5 is generally considered healthy. Mattel's ratio is higher, indicating a more leveraged position.

In recent years, Mattel has been actively managing its debt through various strategic initiatives. These include:

• Debt refinancing to take advantage of lower interest rates and extend maturities.
• Issuing new bonds to raise capital for general corporate purposes.
• Maintaining credit ratings from agencies like Standard & Poor's and Moody's, which reflect the company's creditworthiness.

Balancing debt and equity is a key aspect of Mattel's financial strategy. The company uses a mix of debt and equity to fund its operations, investments, and growth initiatives. Debt financing can provide capital without diluting ownership, but it also introduces fixed interest expenses and the risk of financial distress if not managed carefully. Equity financing, on the other hand, does not require fixed payments but can dilute existing shareholders' ownership.

Here is a table summarizing Mattel's debt and equity information as of December 31, 2024:

For further insights into Mattel's investor profile, you might find this resource helpful: Exploring Mattel, Inc. (MAT) Investor Profile: Who’s Buying and Why?

Mattel, Inc. (MAT) Liquidity and Solvency

Liquidity and solvency are vital indicators of a company's financial health, revealing its ability to meet short-term obligations and sustain long-term operations. For investors in Mattel, Inc. (MAT), a thorough examination of these metrics provides crucial insights into the company's stability and potential for growth. Below is an assessment of Mattel's liquidity, incorporating data from its financial statements.

Assessing Mattel, Inc.'s Liquidity

Mattel's liquidity can be evaluated through several key ratios and financial statement analyses, offering a comprehensive view of its short-term financial health.

• Current and Quick Ratios: These ratios measure Mattel's ability to cover its short-term liabilities with its short-term assets.
• Analysis of Working Capital Trends: Monitoring the trends in Mattel's working capital—the difference between its current assets and current liabilities—helps assess its operational efficiency and liquidity management.
• Cash Flow Statements Overview: Examining Mattel's cash flow statements, specifically the trends in operating, investing, and financing cash flows, provides insights into how the company generates and uses cash.

Let's delve into each of these areas to provide a clearer picture of Mattel's liquidity position.

Current and Quick Ratios

The current ratio and quick ratio are fundamental metrics for assessing a company's ability to meet its short-term obligations. The current ratio is calculated by dividing current assets by current liabilities, while the quick ratio excludes inventories from current assets to provide a more conservative measure.

Based on Mattel's fiscal year 2024 data:

• The current ratio stood at 1.5, indicating that Mattel has $1.50 of current assets for every $1.00 of current liabilities.
• The quick ratio was 0.9, suggesting that Mattel has $0.90 of readily liquid assets for every $1.00 of current liabilities.

These ratios suggest a stable liquidity position for Mattel, with the current ratio comfortably above 1, indicating a good buffer for meeting short-term obligations.

Analysis of Working Capital Trends

Working capital, calculated as current assets minus current liabilities, is a key indicator of a company's operational efficiency and short-term financial health. Monitoring the trends in Mattel's working capital provides insights into how effectively the company manages its short-term assets and liabilities.

For the fiscal year 2024, Mattel's working capital was $800 million. This figure reflects the company's ability to cover its short-term liabilities with its short-term assets, indicating a healthy liquidity position. A positive and stable working capital trend is generally a positive sign, suggesting that Mattel is managing its short-term finances effectively.

Cash Flow Statements Overview

An overview of Mattel's cash flow statements, focusing on the trends in operating, investing, and financing cash flows, provides valuable insights into the company's cash generation and usage patterns.

• Operating Cash Flow: This indicates the cash generated from Mattel's core business operations. A positive and growing operating cash flow is a sign of a healthy and sustainable business. In 2024, Mattel reported an operating cash flow of $650 million, reflecting strong operational performance.
• Investing Cash Flow: This reflects the cash used for investments in assets, such as property, plant, and equipment (PP&E). A negative investing cash flow is typical for companies investing in growth. Mattel's investing cash flow for 2024 was -$200 million, indicating investments in long-term assets.
• Financing Cash Flow: This includes activities related to debt, equity, and dividends. Mattel's financing cash flow for 2024 was -$150 million, suggesting that the company is actively managing its capital structure.

The following table summarizes Mattel's cash flow activities for 2024:

Potential Liquidity Concerns or Strengths

Based on the analysis of Mattel's liquidity metrics, there are several potential strengths and concerns to consider:

• Strengths: Mattel's current ratio of 1.5 and positive operating cash flow of $650 million indicate a strong ability to meet its short-term obligations and generate cash from its core business operations.
• Concerns: While the quick ratio of 0.9 is slightly below 1, it is still within a reasonable range. However, investors should monitor this ratio to ensure it does not decline further.

Overall, Mattel's liquidity position appears stable. The company's ability to generate positive operating cash flow and maintain a healthy current ratio are positive signs. However, investors should continue to monitor key liquidity ratios and cash flow trends to ensure the company maintains its financial health.

For further insights into Mattel's investor profile, consider exploring this resource: Exploring Mattel, Inc. (MAT) Investor Profile: Who’s Buying and Why?

Mattel, Inc. (MAT) Valuation Analysis

Assessing whether Mattel, Inc. (MAT) is overvalued or undervalued requires a multifaceted approach, incorporating key financial ratios, stock performance analysis, and analyst sentiment. Here’s a breakdown of critical valuation metrics:

Key Valuation Ratios:

• Price-to-Earnings (P/E) Ratio: The P/E ratio, a common metric for valuing stocks, compares Mattel's stock price to its earnings per share (EPS). As of the latest data, Mattel's P/E ratio stands at 22.2, indicating the amount investors are willing to pay for each dollar of Mattel’s earnings. This ratio can be benchmarked against industry peers and Mattel's historical P/E to gauge relative valuation.
• Price-to-Book (P/B) Ratio: The P/B ratio, which compares a company's market capitalization to its book value, is another tool for assessing valuation. Mattel's current P/B ratio is 4.7, reflecting how much investors are paying for the company's net assets. A higher P/B ratio might suggest overvaluation or that investors anticipate significant asset growth.
• Enterprise Value-to-EBITDA (EV/EBITDA) Ratio: The EV/EBITDA ratio provides a more comprehensive valuation measure by considering a company's total value (equity plus debt) relative to its earnings before interest, taxes, depreciation, and amortization (EBITDA). Mattel's EV/EBITDA ratio is 13.8.

Stock Price Trends:

Analyzing Mattel's stock price trends over the past year offers insights into market sentiment and company performance. Over the last 12 months, Mattel's stock has shown a positive trend, increasing from $18.85 on April 19, 2024, to $22.04 on April 18, 2025. This growth reflects investor confidence and positive market perception of Mattel's strategic initiatives and financial health.

Dividend and Payout Ratios:

As of now, Mattel does not offer a dividend. Therefore, dividend yield and payout ratios are not applicable in this valuation analysis.

Analyst Consensus:

Financial analysts' ratings provide a crucial perspective on Mattel's stock valuation. The consensus among analysts is a 'Hold' rating, based on evaluations from 14 analysts. These ratings consider various factors, including financial performance, growth prospects, and industry trends, offering a balanced view on whether the stock is a buy, hold, or sell.

For further insights into Mattel's investors, check out: Exploring Mattel, Inc. (MAT) Investor Profile: Who’s Buying and Why?

Mattel, Inc. (MAT) Risk Factors

Mattel, Inc. faces a variety of internal and external risks that could significantly impact its financial health. These risks span across industry competition, regulatory changes, and overall market conditions. Understanding these potential challenges is crucial for investors.

Here's an overview of key risks:

• Industry Competition: The toy industry is highly competitive. Mattel must continually innovate and revitalize its brands to maintain its market position. Failure to adapt to evolving children's play patterns could adversely affect its business.
• Regulatory Changes: Changes in international trade regulations, such as tariffs, can significantly impact Mattel's supply chain and profitability.
• Market Conditions: Macroeconomic factors can influence consumer demand for Mattel's products. Economic downturns or uncertainties can lead to decreased spending on discretionary items like toys.

Recent earnings reports and filings highlight several operational, financial, and strategic risks:

• Supply Chain Disruptions: Mattel's ability to design, develop, produce, manufacture, source, ship, and distribute products on a timely and cost-effective basis is critical. Disruptions, whether due to political instability, natural disasters, or other unforeseen events, can adversely affect its operations.
• Debt and Interest Rate Risk: Mattel's substantial indebtedness exposes it to interest rate risk. Increased interest rates could increase debt service obligations and negatively impact financial results. As of December 31, 2024, Mattel had $2.33 billion of indebtedness on a consolidated basis and $1.40 billion of commitments under its revolving credit facility.
• Inventory Valuation Risk: Uncertain economic conditions make it difficult to estimate growth or contraction in the economies where Mattel operates. This can impact inventory levels and increase inventory valuation risk, especially with the need to prebuild products before orders are placed.
• Tariffs: New U.S. tariffs on imports from China, Mexico, and Canada, announced on February 1st, pose a threat. However, Mattel is implementing mitigating actions, including supply chain optimization and potential pricing adjustments.

Mattel is actively pursuing several mitigation strategies to address these risks:

• Supply Chain Optimization: Mattel is reorienting its supply chain to reduce reliance on any single country. China is expected to make up less than 40% of its sourcing this year, and the company aims to have no single country representing more than about 25% of total global sourcing by 2027.
• Pricing Adjustments: Mattel may adjust prices to offset the impact of tariffs.
• Investment in Innovation: Mattel is focused on revitalizing its brands through innovation and developing owned IP to maintain its competitive position.
• Cost Savings Target: Mattel is tracking ahead of schedule to achieve its $200 million cost savings target by the end of 2026.

In 2024, Mattel demonstrated operational excellence by growing profitability, expanding gross margin, and generating strong free cash flow. The company's priorities for 2025 include growing the top and bottom line while increasing investment in digital games and self-publishing business to drive long-term growth.

Some key financial figures for 2024 include:

Mattel's 2025 guidance includes expectations for net sales to increase by 2% to 3% on a constant currency basis and adjusted EPS to grow by 2% to 6%. This guidance considers the anticipated impact of new U.S. tariffs and mitigating actions.

For additional insights into Mattel's strategic direction, you might find this resource helpful: Mission Statement, Vision, & Core Values of Mattel, Inc. (MAT).

Mattel, Inc. (MAT) Growth Opportunities

Mattel, Inc.'s future growth prospects are anchored in several key strategies, including product innovation, strategic market expansions, and leveraging key partnerships.

Product innovation remains a central driver. Mattel is continually refreshing its product lines and venturing into new categories. For example, in 2024, the company launched new lines of dolls and action figures, incorporating sustainable materials and focusing on inclusivity to resonate with a broader audience. These efforts aim to keep Mattel's offerings relevant and appealing to evolving consumer preferences.

Market expansion, particularly in emerging economies, is another critical growth lever. Mattel has been increasing its presence in regions such as Asia-Pacific and Latin America, tailoring products to local tastes and preferences. This includes introducing region-specific versions of popular toys and games, as well as expanding distribution networks to reach more consumers. These initiatives capitalize on the growing middle class and increasing demand for branded toys in these markets.

Strategic partnerships also play a significant role in Mattel's growth strategy. Collaborations with major entertainment companies, such as film and television studios, allow Mattel to create toys and merchandise based on popular franchises. These partnerships not only drive sales but also enhance brand visibility and appeal.

Future revenue growth projections and earnings estimates suggest a positive trajectory for Mattel. Analysts predict a revenue growth of 3-5% annually over the next three years, driven by the factors mentioned above. Earnings per share are expected to increase at a higher rate, supported by cost-saving initiatives and improved operational efficiency.

Competitive advantages that position Mattel for sustained growth include its strong brand recognition, extensive distribution network, and diverse product portfolio. Mattel's iconic brands, such as Barbie and Hot Wheels, have a loyal following and a proven track record of success. The company's global distribution network ensures that its products are available in a wide range of retail channels, from mass-market stores to specialty toy shops. Additionally, Mattel's diverse product portfolio reduces its reliance on any single product or market, providing resilience in the face of changing consumer trends.

Key strategic initiatives that may drive future growth include:

• Expanding digital gaming and e-commerce platforms to reach a broader audience.
• Focusing on direct-to-consumer sales to improve margins and enhance customer engagement.
• Investing in sustainable materials and eco-friendly packaging to appeal to environmentally conscious consumers.

A SWOT analysis provides additional insights into Mattel's strengths, weaknesses, opportunities, and threats:

These factors collectively suggest that Mattel is well-positioned to capitalize on future growth opportunities and deliver value to its shareholders. More information about Mattel, Inc. (MAT) can be found here: Mission Statement, Vision, & Core Values of Mattel, Inc. (MAT).