Jim Cramer Looks at Mattel’s Strategy to Recover From a Disappointing Quarter

Mattel, Inc. (NASDAQ:MAT) is one of the stocks Jim Cramer looked at. Cramer mentioned the stock during the episode and said:

Okay, what needs to happen for the stock of Mattel to turn itself around? About a month ago, the iconic toy maker reported what people thought was a disappointing quarter. Stock plunged roughly 25% the very next day. Management said replenishment orders from retailers in the United States slowed in December, which led both Mattel and its retail partners to clear inventory more aggressively. That put pressure on the gross margins going into the holidays. Now, Mattel’s asking investors to think about 2026 differently. They see this as an investment year where they’ll spend an extra $150 million on organic growth initiatives, I like that, especially their digital games business. I really like that.

Mattel, Inc. (NASDAQ:MAT) creates and sells toys, games, and media content featuring famous brands like Barbie and Hot Wheels. Longleaf Partners Fund stated the following regarding Mattel, Inc. (NASDAQ:MAT) in its fourth quarter 2025 investor letter:

Mattel, Inc. (NASDAQ:MAT) – Children’s toy, media, and consumer products creator Mattel was a contributor for the quarter and the year. The company is in its strongest position in over 10 years, and there are multiple ways to win. Over 80% of Mattel’s value comes from growing power brands like Hot Wheels, Barbie, and UNO. Mattel has a strong balance sheet which allowed material stock repurchases of $600 million in 2025, and we believe additional share repurchase will come at these discounted prices in 2026. Fundamentally, the toy business continues to grow and gross margins remain strong at 50%. Mattel has a promising owned IP (intellectual property) outlook for 2026 with the Masters of the Universe and Matchbox movies, along with two video games, being released.

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