Mattel (MAT) investor relations material

Executive summary

• Net sales increased 10% year-over-year to $1.13 billion, with double-digit growth in North America and strong performance in vehicles, action figures, and digital games following the Mattel163 acquisition.

• Maintained number one global position in dolls, vehicles, and ITPS categories, with share gains in vehicles and action figures.

• Gross margin declined to 48.2%–48.6% due to tariffs, inflation, higher royalties, and FX, despite cost savings and digital growth.

• Operating income and net income declined sharply, with adjusted EPS at $0.01 and reported EPS at a loss of $0.06.

• Continued execution of capital allocation priorities, including organic growth investments and share repurchases, while maintaining a strong balance sheet.

Financial highlights

• Q2 2026 net sales: $1.13 billion (+10% YoY); North America up 12%, International up 9%.

• Adjusted gross margin: 48.2%–48.6%, down 260–270 bps year-over-year.

• Adjusted operating income: $39 million (down from $96 million prior year); adjusted EBITDA: $95–96 million (down from $117–170 million); adjusted EPS: $0.01 (down from $0.21).

• Free cash flow (TTM): $435 million (down from $530 million prior year); free cash flow for H1 was negative $327.9 million, improved from negative $351.3 million last year.

• Cash at quarter end: $524 million (down from $870 million prior year); total debt: $2.33–2.35 billion; leverage ratio: 3x–5.5x.

Outlook and guidance

• Full-year 2026 guidance reaffirmed: net sales growth of 3–6% in constant currency, adjusted gross margin around 50%, adjusted operating income of $580–$630 million, and adjusted EPS of $1.27–$1.39.

• Vehicles and challenger categories expected to grow strongly, dolls to be comparable, ITPS to decline.

• FX expected to benefit net sales by ~1%; gross margin to improve in H2; no repeat of heavy promotions from 2025.

• Strategic investments of $110 million in 2026 to accelerate growth; majority of $40 million digital marketing for UNO Wild shifted to 2027.

• Guidance subject to market volatility, macroeconomic risks, and global trade/regulatory uncertainties.