Mattel (MAT) Q2 2026 earnings summary

Executive summary

• Net sales rose 10% year-over-year to $1.13 billion, with double-digit growth in North America (+12%) and strong gains in vehicles, action figures, and digital games, partially offset by declines in dolls and ITPS categories.

• Maintained global leadership in dolls, vehicles, and ITPS, gaining share in vehicles and action figures.

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

• Strategic investments and digital expansion, including the full acquisition of Mattel163, are expected to drive significant growth in 2027 and beyond.

• Full-year 2026 guidance reiterated, with positive momentum continuing into Q3.

Financial highlights

• Q2 2026 net sales: $1.13 billion (+10% YoY); North America up 12%, EMEA up 7%, Asia Pacific up 4–8%, Latin America flat to up 4%.

• Adjusted gross margin was 48.6% (down 260–270 bps YoY), primarily due to tariffs, inflation, higher royalties, and FX.

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

• Free cash flow (TTM) was $435M (down from $530M prior year); free cash flow for H1 was negative $327.9M, slightly improved YoY.

• Cash at quarter end was $524M (down from $870M–$1.24B prior year); total debt at $2.33B–$2.35B; leverage ratio at 3x–5.5x.

Outlook and guidance

• 2026 guidance reaffirmed: net sales growth of 3–6% in constant currency, adjusted gross margin ~50%, adjusted operating income $580M–$630M, adjusted EPS $1.27–$1.39.

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

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

• Strategic investments of $110M in 2026 progressing; $40M in digital marketing shifted to 2027 for UNO Wild launch.

• 2027 expected to see mid to high single-digit top-line growth and strong double-digit bottom-line growth, driven by vehicles, Barbie, digital games, and new partnerships.