Mattel's Sales and Profit Growth Trajectory Intact as Brands Continue to Resonate With Consumers

Mattel continues to harvest gains from its turnaround, delivering above break-even operating margins starting in 2019 and reaching around 14% in 2021. We expect Mattel to produce further adjusted operating margin expansion ahead, helped by the execution of its $250 million cost-saving program. While the company's shift to a capital-light strategy should offer lower capital and operating expenditures than in the past (supporting profit growth while allowing for investment in product innovation), near term expenses could be inflated by the tactical investment in dolls and vehicles capacity.