Mattel Reports Strong Q1 Results Amid Tariff Concerns

Mattel‘s (NASDAQ: MAT) stock gained attention following the toy company’s first-quarter results released in early May. Notably, it exceeded analyst expectations in both revenue and earnings. While investor concerns about the ongoing tariff war persist, management expressed confidence in navigating the challenges ahead.

Positive Financial Performance

Mattel reported net sales of just under $827 million, reflecting year-over-year growth of 2%. The non-GAAP (adjusted) net loss per share improved to $0.03, a decrease from last year’s loss of $0.05.

Importantly, both figures surpassed the consensus estimates of $786 million for revenue and an adjusted net loss of $0.09 per share.

Image source: Getty Images.

Investor worries about tariffs were addressed directly by management. They noted that the levies did not impact Q1 performance and are unlikely to affect Q2 results as well. This stability can be attributed to the “timing of inventory flows,” meaning the company has secured most goods needed for manufacturing this quarter.

Should the tariff situation persist, Mattel plans to mitigate potential impacts by diversifying its supply chain. This strategy includes reducing reliance on China, optimizing product sourcing, and strategically adjusting U.S. consumer prices as necessary.

CEO Ynon Kreiz highlighted the company’s sourcing strength, noting that Mattel partners with businesses in seven countries. Moreover, China accounts for less than 40% of the company’s global toy production—significantly lower than the industry average of 80%.

Even prior to the tariffs, Mattel had commenced relocating some production lines away from China.

Growth Through Strategic Partnerships

Looking to the future, Mattel postponed providing full-year 2025 guidance until it gains clearer visibility into the uncertain macroeconomic landscape and U.S. tariff developments.

Nevertheless, the company has upcoming opportunities to drive stock price growth. Kreiz mentioned a successful line of action figures from the A Minecraft Movie, with discussions of a sequel suggesting further market potential.

Additionally, Mattel has established multiyear global licensing agreements with major companies, including Walt Disney for the Toy Story franchise. With Toy Story 5 set for release in 2026, anticipated demand for characters will likely benefit Mattel’s portfolio.

In summary, Mattel’s Q1 performance was robust, coupled with a strategic plan that addresses current global economic challenges. With lucrative licensing deals securing its growth trajectory, the company presents an appealing option for investors.

Should You Invest $1,000 in Mattel?

Before deciding to invest in Mattel, consider this information:

The analysis team at Stock Advisor recently highlighted their top 10 stocks for investment. Notably, Mattel did not make this list, suggesting there may be other opportunities for significant returns.

Historically, early investors have seen substantial gains, such as when Netflix was recommended, turning a $1,000 investment into $614,911 over time.

Similarly, an investment in Nvidia around its recommendation date grew to $714,958. With an average return of 907% from Stock Advisor compared to the S&P 500’s 163%, it may be worth evaluating other options presented in their latest report.

The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.