Mattel, Inc. (MAT.O): Solid Q2; Guidance Still Relies on Big 2H Inflection

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05 Aug 2026 06:49:08 ET │ 17 pages

Mattel, Inc. (MAT.O)

Solid Q2; Guidance Still Relies on Big 2H Inflection

CITI'S TAKE

The key debate for Mattel remains whether the strength in Vehicles and

Challenger categories can continue into next year at the same time that

Barbie experiences a resurgence (a turnaround in which management is

confident) while at the same time digital and other ROI investments begin

to bear fruit. This potential confluence of events would seem to set up quite

nicely for 2027, although we would have said the same for 2026, and

struggle to truly underwrite the out-year opportunity until we see more

tangible evidence of a current-year inflection, which management seems to

believe will show up in 2H.

MAT reported 2Q26 Adjusted EPS of $0.01 , $0.20 worse than last year's $0.21,

and short of our estimate of $0.05 and the Street's $0.04. MAT delivered Adjusted

EBITDA of $96M vs. the Street's $107M and our $112M. 2Q26 net sales of $1.13B were

+10% y/y, beating our/the Street's $1.10B (+8% y/y). Consolidated Adjusted Gross

Margin of 48.6% was -260 bps y/y, a bit better than our estimate of 48.2% and the

Street's 48.1%, albeit well below last year's 51.2%.

n

Neutral

Price (04 Aug 26 16:00)

US$14.86

Target price

US$15.00

Expected share price return

0.9%

Expected dividend yield

0.0%

Expected total return

0.9%

Market Cap

US$4,246M

Price Performance

(RIC: MAT.O, BB: MAT US)

POS trends were stated to be up LSD YTD through 1H, implying some calendardriven weakness in 2Q. With timing crosswinds at play, management disclosed that

YTD POS was up through July, and that this normalizes for the various puts and

takes, and is therefore a better indicator of underlying demand trends.

Full-year EPS remains in the range of $1.27-$1.39 (unchanged vs. prior recast

guidance of $1.27-$1.39). This compares to our previous estimate of $1.32 and the

Street's $1.34, and continues to assume a big step-up in 2H gross margins.

Our 2026 estimate is down $0.03 from $1.32 to $1.29, consisting of a $0.04 Q2

miss vs. our estimates and a back half this is largely unchanged, albeit with a

slightly higher Q3 and a slightly lower Q4 expectation. Similarly, our 2027

…