Why Is Mattel (MAT) Down 1.3% Since Last Earnings Report?

Core Viewpoint - Mattel's recent earnings report shows a mixed performance with earnings exceeding estimates while revenues fell short, indicating potential challenges ahead as the company prepares for future growth initiatives [2][4]. Financial Performance - In Q4 2024, Mattel reported adjusted earnings per share (EPS) of 35 cents, surpassing the Zacks Consensus Estimate of 23 cents by 52.2%, and up from 29 cents in the prior year [4]. - Net sales for Q4 amounted to $1.64 billion, slightly missing the consensus estimate of$1.66 billion by 0.5%, but reflecting a 2% increase year-over-year [4]. - For the full year 2024, net sales totaled $5.38 billion, a decrease from$5.44 billion in 2023, while net income rose significantly to $541.8 million from$214.4 million in 2023 [15]. Segment Performance - North America segment net sales increased by 1% year-over-year, while the International segment saw a 3% increase [5]. - Gross billings for Vehicles rose by 14% year-over-year, driven primarily by Hot Wheels, while Dolls experienced a decline of 4% due to decreased sales of Barbie [10][8]. Cost Management and Shareholder Value - In 2024, Mattel repurchased $400 million worth of shares and is on track to achieve a$200 million cost-savings target by 2026 [3]. - The company plans a $600 million share repurchase program for 2025, emphasizing its commitment to long-term shareholder value creation [3]. Operational Efficiency - Adjusted gross margin for Q4 was 50.8$248.9 million, up from $234 million in the previous year [12]. Future Outlook - For 2025, Mattel anticipates net sales growth of 2-3$1.66 and $1.72, compared to$1.62 in 2024 [16]. - The company maintains a Zacks Rank 2 (Buy), indicating expectations for above-average returns in the coming months [19].