MAT · Mattel, Inc.

Mattel's first quarter 2026 results showed top-line growth but significant margin compression. Net sales rose 4% to $862 million, driven by a 15% increase in International markets, partially offset by a 3% decline in North America. On a constant currency basis, net sales grew 1%. Gross margin fell 450 basis points to 44.9% (adjusted 45.1%), primarily due to the gross incremental cost of tariffs, unfavorable foreign exchange, inflation, and other factors, partially offset by tariff mitigation actions and cost savings. Operating loss widened to $103 million (GAAP) and $70 million (adjusted) from losses of $53 million and $8 million respectively, driven by higher advertising, lower gross profit, and higher SG&A expenses. Reported net income was $61 million ($0.20 per share) compared to a loss of $40 million ($0.12 loss per share) last year, benefiting from a $148 million gain on remeasurement of Mattel's previously held equity interest in Mattel163. Adjusted loss per share was $0.20 versus a loss of $0.02. Management highlighted positive consumer demand and progress on digital strategy, including the acquisition of full ownership of Mattel163 and upcoming mobile game launches. The company repurchased $200 million of shares in Q1 and maintained its $400 million buyback target for 2026. Full-year 2026 guidance was unchanged except for recasting non-GAAP measures to exclude amortization of acquired intangible assets: net sales growth of 3% to 6% in constant currency, adjusted gross margin approximately 50%, adjusted operating income $580-$630 million, and adjusted EPS $1.27-$1.39. The Masters of the Universe movie release on June 5, 2026, was noted as a key catalyst.