Toy manufacturing and entertainment company (NASDAQ: MAT) fell short of the market’s revenue expectations in Q3 CY2025, with sales falling 5.9% year on year to $1.74 billion. Its non-GAAP profit of $0.89 per share was 15.9% below analysts’ consensus estimates.
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Mattel (MAT) Q3 CY2025 Highlights:
- Revenue: $1.74 billion vs analyst estimates of $1.84 billion (5.9% year-on-year decline, 5.5% miss)
- Adjusted EPS: $0.89 vs analyst expectations of $1.06 (15.9% miss)
- Adjusted EBITDA: $466.1 million vs analyst estimates of $539.2 million (26.8% margin, 13.6% miss)
- Adjusted EPS guidance for the full year is $1.60 at the midpoint, roughly in line with what analysts were expecting
- Operating Margin: 21.9%, down from 27.9% in the same quarter last year
- Market Capitalization: $5.92 billion
Ynon Kreiz, Chairman and CEO of Mattel, said: “While our US business was challenged in the third quarter by industry-wide shifts in retailer ordering patterns, the fundamentals of our business are strong, with growth in consumer demand for our products across every region. Since the beginning of the fourth quarter, orders from retailers in the US have accelerated significantly and our POS is growing. Looking into the balance of the year, we expect a good holiday season for Mattel and strong topline growth in the fourth quarter. We are reiterating our full year 2025 guidance and are advancing our strategy to grow our IP-driven toy business and expand our entertainment offering.”
Company Overview
Known for the creation of iconic toys such as Barbie and Hotwheels, Mattel (NASDAQ: MAT) is a global children's entertainment company specializing in the design and production of consumer products.
Revenue Growth
Reviewing a company’s long-term sales performance reveals insights into its quality. Any business can experience short-term success, but top-performing ones enjoy sustained growth for years. Regrettably, Mattel’s sales grew at a sluggish 3.3% compounded annual growth rate over the last five years. This was below our standard for the consumer discretionary sector and is a tough starting point for our analysis.
We at StockStory place the most emphasis on long-term growth, but within consumer discretionary, a stretched historical view may miss a company riding a successful new product or trend. Mattel’s recent performance shows its demand has slowed as its revenue was flat over the last two years. 
This quarter, Mattel missed Wall Street’s estimates and reported a rather uninspiring 5.9% year-on-year revenue decline, generating $1.74 billion of revenue.
Looking ahead, sell-side analysts expect revenue to grow 7.1% over the next 12 months. While this projection indicates its newer products and services will spur better top-line performance, it is still below the sector average.
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Operating Margin
Mattel’s operating margin has shrunk over the last 12 months, but it still averaged 12.7% over the last two years, decent for a consumer discretionary business. This shows it generally does a decent job managing its expenses.
This quarter, Mattel generated an operating margin profit margin of 21.9%, down 6 percentage points year on year. This contraction shows it was less efficient because its expenses increased relative to its revenue.
Earnings Per Share
Revenue trends explain a company’s historical growth, but the long-term change in earnings per share (EPS) points to the profitability of that growth – for example, a company could inflate its sales through excessive spending on advertising and promotions.
Mattel’s EPS grew at an astounding 42.3% compounded annual growth rate over the last five years, higher than its 3.3% annualized revenue growth. However, this alone doesn’t tell us much about its business quality because its operating margin didn’t improve.
In Q3, Mattel reported adjusted EPS of $0.89, down from $1.14 in the same quarter last year. This print missed analysts’ estimates, but we care more about long-term adjusted EPS growth than short-term movements. Over the next 12 months, Wall Street expects Mattel’s full-year EPS of $1.40 to grow 25.7%.
Key Takeaways from Mattel’s Q3 Results
We struggled to find many positives in these results. Its revenue missed and its EPS fell short of Wall Street’s estimates. Overall, this was a weaker quarter. The stock traded down 4.4% to $18.02 immediately following the results.
The latest quarter from Mattel’s wasn’t that good. One earnings report doesn’t define a company’s quality, though, so let’s explore whether the stock is a buy at the current price. When making that decision, it’s important to consider its valuation, business qualities, as well as what has happened in the latest quarter. We cover that in our actionable full research report which you can read here, it’s free for active Edge members.
