Despite Tariff Confusion, Mattel Continues to Invest in Brands to Meet Customer Preferences

Mattel has harvested gains from its turnaround, delivering above breakeven operating margins starting in 2019 and reaching 13.7% in 2024. While Mattel recently reinstated a 2025 outlook as visibility around tariff impact has risen, including 1%-3% sales growth, we still expect modest pressure to the operating margin this year, even with its $200 million cost-saving program (2024-26) underway considering the cautious consumer. Thankfully, the firm's capital-light strategy has helped control capital expenditures, supporting a double-digit operating margin while allowing for investment in product innovation. Beyond 2025, full profit potential could be held back by tactical investments as well as input cost inflation.