Mattel Q2 Sales Rise 10% but Margins Compress; Guidance Reiterated
MAT sits 17% above its 52-week low of $12.728.
Summary
Mattel's Q2 revenue rose 10% to $1.125B, but higher costs drove a net loss of $18M and compressed margins. Full-year guidance was reiterated.
Key Events · Earnings and Guidance · MAT
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Revenue Growth, Margin Pressure
Net sales rose 10% to $1.125 billion, but gross margin fell 270 bps to 48.2% due to tariffs, inflation, and higher royalties. Operating income dropped to $11 million from $78.5 million.
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Bottom-Line Miss
Net loss of $18 million, or $0.06 per share, compared to net income of $53 million a year ago. Adjusted EPS of $0.01 missed the prior year's $0.21.
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Guidance Reaffirmed
Full-year 2026 guidance reiterated: 3-6% constant currency sales growth, adjusted operating income of $580-$630 million, and adjusted EPS of $1.27-$1.39.
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Share Buyback Progress
Repurchased $100 million in shares during Q2, bringing year-to-date total to $300 million; on track for $400 million target in 2026.
Analysis · MAT · Manufacturing
Mattel delivered a mixed quarter: revenue grew 10% to $1.125 billion, driven by Hot Wheels and the newly acquired Mattel163 digital games unit, but gross margin contracted 270 basis points to 48.2% on tariffs and inflation. Operating income fell sharply to $11 million from $78.5 million a year ago, and the company posted a net loss of $18 million. Adjusted EPS of $0.01 missed last year's $0.21. Management reiterated full-year guidance for 3-6% sales growth and adjusted EPS of $1.27-$1.39, and confirmed it remains on track for $400 million in share repurchases this year. The results land against a backdrop of activist pressure from Southeastern Asset Management, which has been pushing for strategic options, and a disappointing 'Masters of the Universe' film release. The quarter shows top-line momentum but significant cost headwinds that are pressuring profitability.
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At the time of this filing, MAT was trading at $14.85 on NASDAQ in the Manufacturing sector, with a market capitalization of approximately $4.3B. The 52-week trading range was $12.73 to $22.48. This filing was assessed with neutral market sentiment and an importance score of 7 out of 10.