Action figures and games see biggest sales increase, as tariffs and inflation hit gross margin
Sales saw double-digit growth in Mattel’s second quarter, but tariffs and inflationary pressures hindered profits, with reported gross margin dipping 48.2 per cent, compared to 50.9 per cent in the second quarter 2025.
Net sales were $1.125bn, up 10 per cent as reported, and nine percent in constant currency compared to last year. The growth was driven by a 12 per cent rise in domestic North American business, and nine per cent internationally.
Action figures and games drew the best performance. Worldwide gross billings across the company’s Action Figures, Building Sets, Games, and Other segment experienced the biggest bump, with worldwide gross billings reaching $358 million, up 35 per cent as reported. Games, including digital experiences through newly acquired Mattel163, and action figures, buoyed by movie releases including June’s Masters of the Universe, saw the largest increase.
“We continued to execute our multi-year strategy to grow our IP-driven play and family entertainment business in the second quarter with strong growth in Net Sales”
Worldwide Gross Billings for Dolls were $318 million, down 5 per cent as reported, primarily due to a decline in Barbie. Vehicles, including Mattel’s Hot Wheels brand, fared far better, up 14 per cent to $463 million.
Ynon Kreiz, Chairman and CEO of Mattel, said the performance set the company on good footing as it heads into the second half.
“We continued to execute our multi-year strategy to grow our IP-driven play and family entertainment business in the second quarter with strong growth in Net Sales,” he said.
“Growth has continued in the third quarter, and we expect to achieve our full year 2026 guidance. Our world-class brand portfolio and product offering, driven by our brand-centric operating model and global capabilities, position us well for the second half of the year.”
Paul Ruh, company CFO, added: “Mattel achieved further savings from our three-year Optimizing for Profitable Growth program, which is on track to achieve $225 million of savings by year-end. In line with our capital allocation priorities, we are making strategic investments to accelerate growth and repurchased another $100 million of shares in the quarter, bringing the year-to-date total to $300 million of shares, and we continue to expect repurchases of $400 million in total this year, while maintaining a strong balance sheet.”
