What You Need to Know
• Mattel (MAT), Hasbro (HAS), and JAKKS Pacific (JAKK) stocks are climbing amid strong consumer demand.
• Toy makers are shifting away from Chinese manufacturing to navigate new U.S. tariffs.
• Retro toys and collectibles are booming, fueled by adult nostalgia and growing “kidult” spending.
• Mattel announces a $600 million share buyback plan, boosting investor confidence.
• Year-to-date: Mattel is up 23.75%, Hasbro has gained 9.55%, and JAKKS Pacific has surged 19.96%.
Market Overview
The toy industry is experiencing renewed momentum as consumer demand for nostalgic and collectible toys surges. Mattel (MAT), Hasbro (HAS), and JAKKS Pacific (JAKK) are benefiting from strategic adjustments, including reducing reliance on Chinese manufacturing to offset the impact of new U.S. tariffs. Mattel aims to lower its China-based production below 40% by 2025, while Hasbro and JAKKS Pacific are also diversifying their supply chains.
Earnings Highlights
Despite macroeconomic challenges, toy companies are delivering solid financial results:
• Mattel reported a 2% increase in Q4 2024 sales, reaching $1.646 billion, fueled by strong demand for Barbie and Hot Wheels.
• Hasbro faced a revenue dip in its Consumer Products segment (down 7%-12%) but is focusing on profitability improvements.
• JAKKS Pacific outperformed expectations, with Q3 2024 sales up 4% and operating income rising 9%.
Industry Trends
The “kidult” market—adults buying toys for nostalgia and stress relief—continues to grow, accounting for a large portion of overall toy sales. Popular retro products like Care Bears, Tamagotchi, and classic board games are experiencing a resurgence, further fueling revenue growth.
“The toy companies are much better positioned than they were during the first Trump administration regarding exposure to China,” observed Jefferies analyst Kylie Cohu, highlighting the industry’s strategic shift to diversify manufacturing and reduce reliance on Chinese production.
Strategic Moves
Mattel has announced a $600 million share buyback plan for 2025, a move expected to strengthen earnings per share and signal confidence in long-term growth. Meanwhile, JAKKS Pacific’s strong sales and operating income improvements suggest continued expansion opportunities.
Stock Performance
As of February 19, 2025, toy stocks are riding a wave of investor optimism:
• Mattel (MAT) is up 23.75% year-to-date.
• Hasbro (HAS) has gained 9.55%.
• JAKKS Pacific (JAKK) has surged 19.96%.
The Oracle Says
“Toy makers are proving their resilience with strategic shifts and a growing adult fanbase. Investors should watch Mattel’s buyback plan and JAKKS Pacific’s continued strength for potential long-term gains.”
