Trend Signal Now: Game Over? Mattel’s Margins Crushed By Tariffs

Mattel Takes it on the Chin

The Q4 2025 earnings results for Mattel and Hasbro have revealed a significant strategic divergence. While both companies faced a "just-in-time" holiday ordering shift from retailers, Hasbro's digital fortress allowed it to withstand the blow, while Mattel's inventory-heavy model led to its worst stock plunge in decades.

Inventory and the Retailer Risk Shift

In late 2025, major retailers like Walmart and Target successfully shifted the risk of unsold toys back onto the manufacturers. By delaying holiday orders until late September and opting for domestic shipping over direct imports, they forced toymakers to act as warehouses.

Mattel's Struggle: Mattel ended the year with $827 million in inventory—a 12% increase—much of which arrived too late for the holiday peak. This "inventory pile-up" was the primary driver of a 480-basis-point drop in adjusted gross margins. CEO Ynon Kreiz admitted that while consumer demand was decent, retailers focused on clearing their own shelves rather than placing fresh orders for Mattel's core brands.

Hasbro's Mitigation: Hasbro managed to keep its inventory more lean, ending the year at roughly $417 million. Because they had already "rationalized" their product lines (cutting unprofitable SKUs), they were less exposed to the retailer destocking trend that hammered Mattel's Fisher-Price and Barbie lines.

Bottom Line: Toys are a Tough Game

The real winner here, if there is one, has to the be retailers who have managed to push inventory and markdown risk to the toy companies instead of carrying the product themselves. Yet another unexpected turn of events stemming from Tariffs.

Click the image below for the rest of my thoughts on Mattel and Hasbro, plus a video I recorded about it.

Jeff Macke | The Macke Portfolio

Wednesday, February 11, 2026

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