Mattel Q3 2025 Sales Fall 6% to $1.74B, Miss Estimates by 5%
Mattel Q3 2025 net sales fell 6% YoY to $1.74B, missing estimates by 5%, with North America down 12% but international up 3%.
TL;DR:Mattel Q3 2025 net sales fell 6% YoY to $1.74B, missing estimates by 5%, with North America down 12% but international up 3%.
Key Takeaways
Mattel Q3 2025 net sales fell 6% YoY to $1.74B, missing estimates by 5%, with North America down 12% but international up 3%.
Adjusted EPS of $0.89 missed $1.05 forecast by 16%, while gross margin held at 50% showing cost discipline amid pressures.
Hot Wheels vehicles surged 8% to $626M, offsetting 11% dolls drop to $674M and 25% preschool decline to $262M.
Free cash flow hit $488-500M, beating $410M expectations, with full-year 2025 EPS guidance steady at $1.54-$1.66.
Company reiterates 1-3% full-year sales growth and eyes Q4 holiday acceleration from rising U.S. retailer orders.
The Big Picture
Mattel reported Q3 2025 adjusted EPS of $0.89, missing estimates by 16%, with net sales of $1.74B, down 6% YoY and 5% below forecasts.
Why It Matters
Mattel's Q3 2025 earnings show net sales of $1,736 million, down 6% reported (7% constant currency), yet 50.0% gross margin signals robust cost discipline amid cyclical toy demand pressures. This margin resilience validates operational efficiency and supports the firm's trajectory toward sustained profitability, aligning with its 18.9% ROE and iconic brand portfolio driving long-term family entertainment growth.
By The Numbers
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EPS: $0.89 vs $1.05 expected
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Revenue: $1.74B vs $1.86B expected
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Gross Margin: 50.0% vs 51.0% expected
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Operating Income: $466M EBITDA vs $541M expected
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Net Income: $542M trailing twelve months
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Free Cash Flow: ~$500M, above ~$410M expected
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Full-Year EPS Guidance: $1.54–$1.66 vs $1.61 street
The Details
Q4 Revenue Breakdown
Mattel reported Q4 net sales of $1.65B, up 2% YoY and slightly above the $1.64B consensus. Vehicles (Hot Wheels) drove growth, offsetting declines in Dolls and Infant/Preschool segments. This highlights brand strength amid category shifts.
Margin Trends
Adjusted gross margin expanded in recent quarters, reaching ~50% in Q3 2025 and supporting full-year priorities. Q4 results contributed to TTM gross margin of 50.47% on $5.23B revenue. Operational efficiency boosted profitability ahead of targets.
2025 Guidance Analysis
Mattel forecasts 2-3% constant-currency net sales growth and adjusted EPS of $1.66-$1.72, topping $1.58 consensus. Plans address U.S. tariffs via supply chain and pricing. This signals confidence despite Q3 sales miss.
Market Reaction
Shares surged 8% after-hours post-Q4 beat and upbeat outlook. Valuation shows P/E 14.08, ROE 18.9%, market cap $5.8B. Positive response underscores investor optimism on execution.
The Bottom Line
Mattel’s Q3 2025 earnings missed estimates with net sales at $1.74B (vs. $1.84B expected) and adjusted EPS at $0.89 (vs. $1.06), driven by weakness in dolls and preschool segments despite vehicles strength. The company maintained full-year guidance, including 1-3% sales growth and $1.54-$1.66 EPS. Expect Q4 holiday topline acceleration per CEO.
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