Mattel (MAT) Q2 2026 earnings show a 10% revenue increase to $1.1B, driven by strong IP growth in vehicles and action figures, despite margin pressures.
Mattel, Inc. reported Q2 2026 revenue of $1.1 billion (USD), an increase of 10% year-over-year and above the $1.04 billion consensus. The strong performance was largely fueled by growth in owned and partner intellectual property (IP), particularly in vehicles and action figures, which reflects a successful brand-centric strategy.
Key Takeaways
- Net Sales rose 10% year-over-year to $1.1 billion, driven by strong performance in North America and digital games.
- Adjusted Operating Income fell to $39 million from $96 million in the previous year, primarily due to higher advertising costs and lower gross margins.
- Gross Margin declined to 48.6%, impacted by inflation and tariffs, but expected to improve in the second half of 2026.
- Share Repurchases totaled $100 million in the quarter, part of a year-to-date total of $300 million, on track to meet the $400 million annual target.
- Full-Year Guidance reiterated for net sales growth of 3% to 6% in constant currency, with adjusted EPS expected between $1.27 and $1.39.
Strong Growth in IP-Derived Revenue
Net sales increased 10% year-over-year to $1.1 billion, with a 9% increase in constant currency. This growth was primarily driven by the success of Mattel's owned and partnered IP. The company reported that it was the number one toy brand globally in several categories, including dolls, vehicles, and action figures. Vehicles, particularly Hot Wheels, grew 12%, while the action figures category benefitted from theatrical releases such as Toy Story 5 and Masters of the Universe, leading to increased sales in that segment.
| Metric | Q2 2026 | YoY | QoQ |
|---|---|---|---|
| Revenue | $1.1B | +10% | N/A |
| Adjusted Operating Income | $39M | -59% | N/A |
| Gross Margin | 48.6% | -5.1% | N/A |
Margin Challenges Amid Inflation
Adjusted gross margin fell to 48.6% from 53.7% a year ago, primarily due to the impacts of tariffs (170 basis points), inflation (120 basis points), and higher royalties (110 basis points). Despite these pressures, management expects gross margin to improve in the second half of 2026 as they do not anticipate a repeat of the promotional activities that negatively affected margins in 2025. The integration of Mattel 163 is expected to contribute positively to margins moving forward.
Digital Expansion and Future Outlook
Management reiterated their full-year 2026 guidance, projecting net sales growth of 3% to 6% in constant currency, and an adjusted EPS in the range of $1.27 to $1.39. Investments in digital gaming are expected to pay off, with the launch of two self-published mobile games, including Uno Wild. This strategic move aims to deepen consumer engagement and capture more value from existing IP.
“2026 is an investment year that will deliver benefits and fruits in 2027,” said Inon Kreiz, Chairman and CEO. The company anticipates a significant uptick in top and bottom-line growth as these investments mature.
Analyst Insights: Focus on Barbie and Action Figures
During the Q&A session, analysts pressed management on the outlook for Barbie, especially following recent declines in doll revenues. Roberto Stanichi, President and Chief Marketing and Brand Officer, highlighted a renewed focus on content and product launches, such as the upcoming Barbie Nutcracker animated special and the new Barbie Dreamhouse. These efforts aim to reinvigorate the brand and are expected to lead to a return to growth in 2027.
Analysts also noted the impressive performance of the action figures segment, which has shown resilience thanks to major film releases. Mattel is becoming a market leader in this category, with expectations for continued growth driven by upcoming theatrical releases and the successful integration of partnerships.
Frequently Asked Questions
Did Mattel, Inc. beat earnings estimates in Q2 2026?
Yes, Mattel reported adjusted earnings per share of $0.01, which was below the consensus estimate of $0.21, indicating a miss by $0.20.
What is Mattel's full-year guidance for 2026?
Mattel reiterated its full-year guidance for 2026, expecting net sales growth of 3% to 6% in constant currency and adjusted EPS in the range of $1.27 to $1.39.
How did Mattel’s digital gaming initiatives perform in Q2 2026?
The acquisition of Mattel 163 contributed nearly $49 million in revenue and about $14 million in adjusted operating income during Q2 2026, showcasing the potential of their digital gaming initiatives.
What are the expectations for Barbie’s performance in 2027?
Management expects Barbie to return to growth in 2027, driven by increased investment in content and new product launches, including a new animated special and the Barbie Dreamhouse.
The next quarter will be pivotal in determining if Mattel can sustain its growth trajectory, particularly as it navigates inflationary pressures and shifts in consumer demand across its diverse IP portfolio.
This analysis is based on public earnings call materials and is not investment advice.
