Profit Margins on the Rise at Mattel Thanks to Improved Mix and Cost-Cutting Measures

Mattel continues to harvest gains from its turnaround, delivering above breakeven operating margins starting in 2019 and reaching around 12% in 2023. Despite the outlook for little sales growth, we expect Mattel to produce further operating margin expansion in 2024, thanks to its $200 million cost-saving program (2024-26). Additionally, the firm's shift to a capital-light strategy has provided lower capital and operating expenditures than in the past, supporting profit growth while allowing for investment in product innovation. However, profits could be held back by tactical investments in dolls and vehicles as well as logistics and input cost inflation.