Industry Growth and Positive Point-of-Sale Metrics Point to Positive Takeaway for Mattel Brands

Mattel has harvested gains from its turnaround, delivering above breakeven operating margins starting in 2019 and reaching 13.7% in 2024. While Mattel reiterated its 2025 outlook despite an evolving tariff policy, which includes 1%-3% constant-currency sales growth, we still expect modest pressure on the operating margin this year. This is even with a $200 million cost-saving program (2024-26) underway, given the cautious consumer. Thankfully, the firm's capital-light strategy has helped control capital expenditures, supporting a double-digit operating margin while allowing for product innovation investments. Beyond 2025, when we model a 13% adjusted operating margin, full profit potential could be tempered by tactical investments as well as input cost inflation.