Mattel (MAT) Up 5.2% Since Last Earnings Report: Can It Continue?

Core Insights - Mattel's recent earnings report showed adjusted EPS of 19 cents, surpassing the Zacks Consensus Estimate of 16 cents, while net sales of $1.02 billion fell short of the consensus estimate of $1.06 billion, marking a 6% decline year over year [5][2] - The company demonstrated resilience in its second-quarter performance, achieving gross margin expansion and international growth despite challenges in the U.S. market [3][4] Financial Performance - Adjusted gross margin improved to 51.2%, up 200 basis points year over year, driven by cost savings and a favorable product mix, although partially offset by cost inflation [10] - Adjusted EBITDA for the quarter was $169.9 million, slightly down from $170.8 million in the prior-year quarter [11] Segment Analysis - North America segment net sales declined 16% year over year, attributed to decreased sales in Dolls and Infant, Toddler, and Preschool categories [6] - In contrast, the International segment saw a 7% increase in net sales year over year, primarily driven by growth in the EMEA and Asia Pacific regions [7] Category Performance - Worldwide gross billings from Mattel Power Brands decreased by 4% year over year to $1.15 billion, with Barbie gross billings falling by 25% [8] - Hot Wheels gross billings increased by 9%, while Fisher-Price saw a decline of 21% year over year [9] Balance Sheet - As of June 30, 2025, Mattel's cash and cash equivalents rose to $870.5 million from $722.4 million a year earlier, while long-term debt decreased to $1.73 billion from $2.33 billion [12] Market Outlook - Estimates for Mattel have trended downward, with a consensus estimate shift of -5.69% over the past month, indicating a cautious outlook [13] - The stock currently holds a Zacks Rank 3 (Hold), suggesting an expectation of in-line returns in the coming months [15]