MAT changes
Pick any two versions below to diff them.
- Price
- $17.20 → $16.08(−6.5%)
- Discount category
- Below intrinsic value → Well below intrinsic value
- Next earnings
- Nov 5, 2026 → Feb 5, 2027
- Next earnings is estimate
- No → Yes
- 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. added: On November 5, 2026, Mattel removed: expects added: cut its 2026 added: guidance for adjusted EPS removed: of added: to $1.05 to $1.20, which leaves out tariff refunds, from $1.27 to $1.39, removed: lower than the $1.49 added: and it now expects an adjusted gross margin of removed: 2025. added: roughly 48%. In 2025, adjusted EPS was $1.49. 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, and a new CFO started on October 20, 2026. added: EdgePoint, the largest shareholder with about 18% of the shares, got a board seat on October 21, 2026. For the gap to close, three things must be true. Mattel must reach its added: lower 2026 removed: guidance, with an adjusted gross margin of about 50% for the full year, added: guidance 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 removed: Q3 2026 report on November 5, 2026 and the full-year report with the 2027 removed: guidance added: guidance, expected in February removed: 2027 are added: 2027, is the removed: tests. added: next test. 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.
- Risks
- 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. Tariffs and inflation lower the gross margin. The adjusted gross margin fell 260 basis points in Q2 2026. removed: Mattel's guidance does not include possible refunds added: Mattel received $88 million of removed: IEEPA tariffs, added: tariff refunds in Q3 2026, but its guidance leaves out tariff refunds, and class actions filed in July 2026 claim that customers should get some of those refunds. The CEO and the CFO changed in October added: 2026, and a new President and Chief Operating Officer starts on November 11, 2026. A new management team can change the strategy, the costs or the guidance, and the amended offer letter shows that the board considers a possible change of control. 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.
- Balance sheet
- Cash: removed: $524M added: $541M Debt: $2.3B Net debt: $1.8B added: Interest cover: 4.1× Undrawn credit line: $1.4B, to July 2029 Debt due within 12 months: $0.0M At removed: June added: September 30, 2026, long-term debt was $2.33 billion, and there was no current portion of long-term debt. Cash was removed: $524 added: $541 million, so net debt was removed: $1.81 added: about $1.79 billion. Cash is low removed: at mid-year because Mattel builds inventory before the holiday season added: because Mattel builds inventory and collects most cash in Q4. Mattel has $1.40 billion of senior unsecured revolving credit removed: facilities. added: facilities that mature in July 2029, with no borrowings and about $13 million of letters of credit at September 30, 2026. Its senior notes include notes due 2027 and 2029. removed: Operating added: Interest cover is operating income removed: was negative in added: divided by interest expense for the removed: first half of added: nine months to September 30, 2026, which removed: is normal for added: includes the removed: season, so this page does not show an interest cover. added: $88 million of tariff refunds in Q3. Interest expense was removed: $62.8 added: $94.7 million in the added: nine months. Mattel used $308 million for share buybacks in the first removed: half added: nine months of removed: 2026. added: 2026, and about $1.2 billion of its authorization was left. As of removed: Jun added: Sep 30, 2026.
- Checkpoints
- Nov 5, 2026: Q3 2026 earnings: 2026 guidance. removed: Pending. added: Failed. Watch: Growth in net sales and an unchanged 2026 guidance pass; a cut to the adjusted EPS guidance fails. added: Outcome: Net sales grew 4%, but Mattel cut its 2026 adjusted EPS guidance to $1.05 to $1.20 from $1.27 to $1.39. Feb added: 5, 2027 (estimate): 2027 guidance under the new CEO. Pending. Watch: A 2027 plan with higher adjusted EPS and a stable gross margin passes; lower profits or a large new restructuring fail.
- Recent events
- added: Nov 5, 2026: Mattel reported Q3 2026 results. Net sales rose 4% to $1,807 million. The adjusted gross margin rose to 55.0% from 50.2%, mainly because of $88 million of tariff refunds. Adjusted EPS was $1.30, up from $0.91. Hot Wheels billings rose 7%, but Barbie and Fisher-Price declined. Mattel cut its 2026 guidance to adjusted EPS of $1.05 to $1.20 and an adjusted gross margin of roughly 48%, with net sales growth of 1% to 4% in constant currency, and the guidance leaves out tariff refunds. It also named Steve Totzke as President and Chief Operating Officer from November 11, 2026. Oct added: 21, 2026: Mattel signed a cooperation agreement with EdgePoint Investment Group, which owns about 18% of its shares, and appointed Lee Matheson, a Partner at EdgePoint, to the board. Oct 19, 2026: Mattel named Peter Griffith, the former CFO of Amgen, as Chief Financial Officer and as a director from October 20, 2026. He succeeds Paul Ruh, who stays as an executive advisor until December 31, 2026. Oct 14, 2026: 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. Sep 30, 2026: 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. Aug 4, 2026: 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. Jul 31, 2026: Mattel promoted Roberto Stanichi to President, Chief Marketing and Brand Officer. He leads the global brands, including Hot Wheels, Barbie, Fisher-Price and UNO. Mar 2, 2026: Mattel bought the remaining 50% of Mattel163, a mobile games studio, from NetEase. The studio became a wholly owned subsidiary.