Why Is Mattel (MAT) Up 1.5% Since Last Earnings Report?

Core Viewpoint - Mattel's Q3 2025 earnings and revenues fell short of expectations, with both metrics declining year over year, raising concerns about future performance [2][3][6]. Financial Performance - Adjusted EPS for Q3 was 89 cents, missing the consensus estimate of $1.05, and down from $1.14 in the prior year [6]. - Net sales were reported at $1.74 billion, missing the estimate of $1.81 billion by 4.1%, and reflecting a 6% decline year over year [6]. - North America segment sales decreased by 12% year over year, while international sales increased by 3% [7]. Segment Performance - Gross billings for key segments showed mixed results: Barbie fell by 17%, Fisher-Price declined by 19%, while Hot Wheels increased by 8% [9][10]. - International gross billings rose by 5%, driven by growth in EMEA and Asia Pacific regions [8]. Operational Insights - Adjusted gross margin decreased to 50.2%, down 290 basis points year over year, primarily due to foreign exchange impacts and inflationary pressures [11]. - Adjusted EBITDA for the quarter was $466.1 million, down from $584.4 million in the previous year [11]. Strategic Initiatives - The company is implementing a brand-centric organizational structure and has launched new product lines to drive growth [4]. - Collaboration with retail partners and a partnership with OpenAI are part of the strategy to navigate current challenges [5]. Guidance and Outlook - For 2025, Mattel expects net sales growth of 1% to 3% and adjusted EPS in the range of $1.54 to $1.66 [13]. - The company maintains its full-year guidance despite recent performance challenges [3]. Market Sentiment - Estimates for the stock have trended upward recently, with a notable 24.61% shift in consensus estimates [14]. - Despite this, the stock holds a Zacks Rank 4 (Sell), indicating expectations of below-average returns in the near term [16].