# Mattel (MAT)

Sector: Toys & entertainment

| Field | Value |
|---|---|
| Price | $17.20 |
| Fair value (Analysts) | $23.00 |
| Discount to fair value | 25.2% |
| Fair value uncertainty (Analysts) | High |
| Economic moat (Analysts) | Narrow |
| LSEG analyst rating (1 strong buy to 5 strong sell) | 2.13 |
| Data as of | 2026-10-16 |
| Next earnings | 2026-11-04 (estimate) |

## In short

The market prices Mattel for lower margins from tariffs and a new CEO, and a holiday season that meets the 2026 guidance with a clear 2027 plan can close the gap.

## Themes and gap

- Themes: Tariffs and trade (trade-tariffs), Weak consumer (weak-consumer), New management (management-change)
- Gap type: Can close (closable)
- Why: The holiday quarter, the Q3 2026 report and the 2027 guidance from the new CEO in February 2027 give dated tests.

## About

Mattel is one of the largest toy companies in the world. Its brands include Barbie, Hot Wheels, Fisher-Price, UNO and American Girl. It designs toys and games, makes them in its own plants and through suppliers, and sells them through retailers and online. It also earns money from licenses, films, television and digital games, and it calls itself an IP-driven play and family entertainment company. On March 2, 2026, it bought the remaining 50% of Mattel163, a mobile games studio, from NetEase, so the studio is now a wholly owned subsidiary. Net sales were $5.35 billion in 2025. Most sales happen in the second half of the year, before the holiday season.

## Thesis

The market prices Mattel for lower profits from tariffs and cost inflation and for uncertainty after a change of CEO. In Q2 2026, net sales grew 10%, but the adjusted gross margin fell to 48.6% from 51.2%, and adjusted EPS fell to $0.01 from $0.21. Mattel expects 2026 adjusted EPS of $1.27 to $1.39, lower than the $1.49 of 2025. Barbie and Fisher-Price sales fell in Q2 2026, and the growth came from Hot Wheels, games and action figures. Ynon Kreiz left as CEO on October 2, 2026, and Roger Lynch, a board member since 2018, started as CEO on October 12, 2026. For the gap to close, three things must be true. Mattel must reach its 2026 guidance, with an adjusted gross margin of about 50% for the full year, after the important holiday quarter. Barbie and Fisher-Price must stop their decline. The new CEO must keep the cost savings and show a clear plan for 2027 that grows profits from the toy and the entertainment business. The Q3 2026 report, expected in late October or early November 2026, and the full-year report with the 2027 guidance in February 2027 are the tests. If these checks pass, the gap can close over the next three to five quarters. The main reason it may not close is a weak holiday season, which would force a cut to the 2026 guidance.

## Checkpoints

- Nov 4, 2026 (estimate): Q3 2026 earnings: 2026 guidance. Status: Pending. Watch: Growth in net sales and an unchanged 2026 guidance pass; a cut to the adjusted EPS guidance fails.
- Feb 2027 (estimate): 2027 guidance under the new CEO. Status: Pending. Watch: A 2027 plan with higher adjusted EPS and a stable gross margin passes; lower profits or a large new restructuring fail.

## Balance sheet

- Cash: $524M
- Debt: $2.3B
- Net debt: $1.8B
- Debt due within 12 months: $0.0M

At June 30, 2026, long-term debt was $2.33 billion, and there was no current portion of long-term debt. Cash was $524 million, so net debt was $1.81 billion. Cash is low at mid-year because Mattel builds inventory before the holiday season and collects most cash in Q4. Mattel has $1.40 billion of senior unsecured revolving credit facilities. Its senior notes include notes due 2027 and 2029. Operating income was negative in the first half of 2026, which is normal for the season, so this page does not show an interest cover. Interest expense was $62.8 million in the first half of 2026.

As of 2026-06-30.

Sources:

- https://www.sec.gov/Archives/edgar/data/63276/000162828026052674/matq22026earningsrelease.htm
- https://www.sec.gov/Archives/edgar/data/63276/000162828026054347/mat-20260630.htm

## Recent events

- 2026-10-14: Mattel amended the offer letter of Roger Lynch. His start date as CEO became October 12, 2026. The amendment also changes his benefits if a change of control causes his job to end on or before December 31, 2028. Mattel said that it made the change after recent external developments.
- 2026-09-30: Mattel named Roger Lynch, a board member since 2018 and the CEO of Condé Nast since 2019, as Chairman from October 2, 2026 and as CEO from on or before November 2, 2026. He succeeds Ynon Kreiz, who left on October 2, 2026 to take a senior position at another public company.
- 2026-08-04: Mattel reported Q2 2026 results. Net sales were $1,125 million, up 10%. The adjusted gross margin fell to 48.6% from 51.2% because of tariffs, inflation, higher royalties and foreign exchange. Adjusted EPS was $0.01, compared with $0.21 a year earlier. Mattel kept its 2026 guidance of adjusted EPS of $1.27 to $1.39 and share repurchases of $400 million, of which it had done $300 million in the first half.
- 2026-07-31: Mattel promoted Roberto Stanichi to President, Chief Marketing and Brand Officer. He leads the global brands, including Hot Wheels, Barbie, Fisher-Price and UNO.
- 2026-03-02: Mattel bought the remaining 50% of Mattel163, a mobile games studio, from NetEase. The studio became a wholly owned subsidiary.

## Risks

- High: Most of Mattel's profit comes in the holiday season. If retailers order less, or consumers spend less in Q4 2026, Mattel can miss its 2026 guidance.
- Medium: Tariffs and inflation lower the gross margin. The adjusted gross margin fell 260 basis points in Q2 2026. Mattel's guidance does not include possible refunds of IEEPA tariffs, and class actions filed in July 2026 claim that customers should get some of those refunds.
- Medium: The CEO changed in October 2026. A new CEO can change the strategy, the costs or the guidance, and the amended offer letter shows that the board considers a possible change of control.
- Low: Barbie and Fisher-Price billings fell in Q2 2026. If these large brands continue to decline, growth in Hot Wheels and games may not be enough.

## Links

- Page: https://picks.kamadorueda.com/company/MAT/
- History of changes: https://picks.kamadorueda.com/company/MAT/history/
- JSON with full history: https://picks.kamadorueda.com/data/company/MAT.json

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