Mattel Analyst Sees Hot Wheels Growth While Barbie Faces Mixed Outlook

Mattel Inc. (MAT) is set to report its fourth-quarter and full-year 2024 financial results, with analysts expecting a mixed outlook for the iconic Barbie brand while anticipating growth for the popular Hot Wheels franchise. The company's shares have surged following its upbeat annual profit forecast, despite potential tariff-related uncertainty.

Mattel's Barbie brand, which celebrates its 60th anniversary this year, has faced a mixed outlook in recent quarters. The company reported a 4% decline in worldwide gross billings for dolls in the fourth quarter of 2024, contributing to a 2% increase in net sales to $1.65 billion. Despite the decline, Mattel remains optimistic about the brand's long-term prospects, particularly with the upcoming Barbie movie set to release in 2023.

Analysts have noted that Mattel's cost-control measures and supply chain optimization efforts have been crucial in helping the company navigate tariff-related challenges and maintain profitability. By reducing its exposure to China, streamlining its supply chain, and potentially adjusting prices, Mattel has been able to mitigate the impact of tariffs on its products and bottom line.



Hot Wheels, on the other hand, has shown significant growth compared to other Mattel products. In the fourth quarter of 2024, Hot Wheels led growth in the Vehicles category with a 14% increase in sales. This growth can be attributed to several factors, including strong demand and popularity, strategic partnerships with popular brands like Ferrari and Formula 1, innovation and product variety, and effective marketing and promotions.

Mattel's 2025 guidance projects 2-3% net sales growth in constant currency, with adjusted EPS expected between $1.66-$1.72. The company expects a net sales growth of 2% to 3% for 2025, slightly below analysts' expectations of a 2.7% rise to $5.51 billion. Despite the mixed outlook for Barbie, Mattel's strong performance in other product categories, such as Hot Wheels, and its cost-control measures have positioned the company well for the coming year.

In conclusion, Mattel's cost-control measures and supply chain optimization efforts have been instrumental in navigating tariff-related challenges and maintaining profitability. While the iconic Barbie brand faces a mixed outlook, the popular Hot Wheels franchise is expected to continue its strong growth trajectory. As Mattel reports its fourth-quarter and full-year 2024 financial results, investors will be watching closely to see how the company's strategies and performance align with analysts' expectations.