Mattel, Inc.

What they do

Mattel designs and sells toys and family entertainment products across four categories: Dolls, Vehicles, Infant/Toddler/Preschool, and Action Figures, Building Sets, Games, and Other. It also licenses its IP for film, television, consumer products, and location-based entertainment, and operates a digital games studio (Mattel163).

Revenue drivers

• Dolls — Includes Barbie, American Girl, Monster High, Polly Pocket, and licensed lines like Disney Princess/Frozen. Q2 2026 gross billings were $318M, down 5% as reported due to a decline in Barbie.
• Vehicles — Led by Hot Wheels and Matchbox, plus licensed Cars (Disney Pixar). Q2 2026 gross billings were $463M, up 14% as reported, driven by growth in the segment.
• Infant, Toddler, and Preschool — Includes Fisher-Price, Little People, Thomas & Friends, and Baby Gear/Power Wheels (some exited/licensed out). This is a core segment targeting younger children.
• Action Figures, Building Sets, Games, and Other — Includes licensed franchises like Jurassic World, WWE, Minecraft, and Star Wars, plus owned IP like Masters of the Universe, MEGA, UNO, and new Mattel Brick Shop building sets.

Recent performance

Q2 2026 (ending June 30, 2026) net sales were $1.125B, up 10% as reported and 9% constant currency. Gross margin declined to 48.2% (adjusted 48.6%), operating income fell $68M to $11M, and the company reported a net loss of $18M vs. net income of $53M a year ago. Full-year 2025 net sales were $5.35B, down 1% from 2024, with net income of $398M and EPS of $1.24. The Q2 margin decline was due to tariffs, inflation, higher royalties, and FX, partially offset by Mattel163 contribution and cost savings.

Strategy

The stated strategy is to grow toy brands through innovation and appeal to adult fans/collectors, expand direct-to-consumer reach and retail development, broaden content across film/TV/short-form, accelerate licensing in consumer products and location-based entertainment, scale digital play via self-published mobile games and Mattel163, and optimize operations using AI. Mattel is executing the Optimizing for Profitable Growth program, targeting $225M in annual gross cost savings. It is investing in digital gaming, with the first self-published mobile game launched and a second in soft launch, and it integrated the Mattel163 studio. The company repurchased $300M of shares in the first half of 2026 and reaffirmed a $400M full-year repurchase target.

Risks

• Tariff and trade policy uncertainty — U.S. tariffs and evolving trade policy, including the recent Supreme Court ruling and new announced tariffs, create uncertainty around costs, supply chain, and refunds.
• Consumer preference shifts — Failure to identify or satisfy changing consumer preferences could hurt product appeal and sales, especially across geographic markets.
• Retail ordering volatility — 2025 showed U.S. retailers delayed orders in Q2/Q3, then accelerated in Q4; such swings can disrupt production and financial performance.
• Gross margin pressure — Tariffs, inflation, higher royalties, and unfavorable FX reduced gross margin by 270 bps in Q2 2026; continued pressure could impact profitability.

Outlook

Management says consumer demand is positive year-to-date and growth continued in Q3 2026, so it expects to achieve full-year 2026 guidance. Q2 results included strong net sales growth in North America (12% as reported) and International (9% as reported). The company reiterates its 2026 guidance and $400M share repurchase target.