Here's What Investors Should Know Ahead of Mattel's Q1 Earnings

Mattel, Inc. MAT is scheduled to report its first-quarter 2025 results on May 5, after the closing bell.

In the last quarter, the company’s earnings topped the Zacks Consensus Estimate by 52.2% while the revenues missed the same by 0.5%. However, the metrics rose 20.7% and 2%, respectively, from the year-ago figures.

Markedly, Mattel reported better-than-expected earnings in each of the trailing four quarters, the average surprise being 37.6%.

Trend in MAT’s Estimate Revision

For the quarter to be reported, the Zacks Consensus Estimate of loss has widened from nine cents per share to 11 cents over the past 30 days. The estimated value indicates a 120% year-over-year decline. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)

For revenues, the consensus mark is pegged at $799.7 million, reflecting a drop of 1.2% from the year-ago figure of $809.5 million.

Factors to Note Ahead of Mattel’s Q1 Release

Mattel's first-quarter 2025 revenues are expected to have declined year over year due to the tepid performance of the Barbie brand in North America and International markets, overshadowing the improvements across Hot Wheels and Fisher-Price brands. Also, unfavorable foreign currency exchange is likely to have added to the declining trends in the top line and overall profitability scenario of the company.

The Zacks Consensus Estimate for Worldwide gross billings by the top three Power Brands, Barbie, Fisher-Price and Hot Wheels, is pegged at $165 million, $95 million and $263 million, respectively, down 7.3% and up 2.2% and 1.9% year over year.

Moreover, the company’s bottom line is likely to have been hurt by elevated other selling and administrative expenses, mainly due to higher employee compensation accompanied by increased advertising and promotion expenses.

Although Mattel’s focus on cost-control initiatives, IP-driven strategy and diversified entertainment offerings is encouraging, the ongoing macro headwinds suppressing discretionary spending and an inflationary market scenario are likely to have weighed heavily on the tailwinds.

What the Zacks Model Unveils for MAT

Our proven model does not conclusively predict an earnings beat for Mattel this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. That is not the case here.

Earnings ESP: MAT has an Earnings ESP of -4.76%. You can uncover the best stocks before they’re reported with our Earnings ESP Filter.

Zacks Rank: The company currently carries a Zacks Rank #4 (Sell).

You can see the complete list of today’s Zacks #1 Rank stocks here.

Stocks With the Favorable Combinations

Here are some companies in the Zacks Consumer Discretionary sector, which according to our model, have the right combination of elements to beat on earnings in their respective quarters to be reported.

Accel Entertainment, Inc. ACEL currently has an Earnings ESP of +22.22% and a Zacks Rank of 3.

The company’s earnings for the first quarter of 2025 are expected to decline 18.2% year over year. Accel reported better-than-expected earnings in three of the last four quarters and missed on the remaining occasion, the average surprise being 10.4%.

Malibu Boats, Inc. MBUU currently has an Earnings ESP of +10.04% and a Zacks Rank of 3.

The company’s earnings for the third quarter of fiscal 2025 are expected to grow 6.4%. Malibu Boats reported better-than-expected earnings in three of the last four quarters and missed on the remaining one occasion, the average surprise being 53%.

Atour Lifestyle Holdings Limited ATAT has an Earnings ESP of +6.45% and a Zacks Rank of 3.

The company reported better-than-expected earnings in three of the last four quarters and met on the remaining occasion, the average surprise being 5.2%. Atour Lifestyle’s earnings for the first quarter of 2025 are expected to rise 19.2%.

5 Stocks Set to Double

Each was handpicked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2024. While not all picks can be winners, previous recommendations have soared +143.0%, +175.9%, +498.3% and +673.0%.

Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research