Mattel Shares Surge on Optimistic Profit Forecast

Mattel's shares surged 14% following an optimistic annual profit forecast, despite ongoing tariff challenges, and plans for price increases to offset these impacts. The company foresees an adjusted EPS of $1.66 to $1.72, surpassing analyst expectations of $1.57, and announced a $600 million stock buyback. Mattel's earnings report showed a surprise profit of $0.35 per share, beating estimates of $0.23, with revenue slightly below expectations. Efforts to mitigate tariff impacts include shifting production away from China and cost-saving measures, as China currently accounts for about 40% of Mattel's production. Despite overall sales declining by 1% in 2024, Mattel managed to expand gross margins, driven by strong demand for Hot Wheels and action figures, although Barbie sales struggled. Looking forward, the company targets 2-3% sales growth in 2025, aiming to achieve significant cost savings and production diversification.