Mattel’s second quarter saw revenue growth above Wall Street’s expectations, driven by continued strength in core brands like Hot Wheels and the integration of Mattel163’s digital gaming business. However, adjusted profit fell well short of analyst forecasts due to higher investment in advertising and strategic initiatives, as well as margin pressures from tariffs, inflation, and increased royalty costs. Management highlighted the impact of elevated spending on brand marketing and digital content, with CFO Paul Ruh noting, "Adjusted operating income was lower primarily due to higher advertising and SG&A expenses as well as lower gross margin, partly offset by higher net sales."
Is now the time to buy MAT? Find out in our full research report (it’s free for active Edge members).
Mattel (MAT) Q2 CY2026 Highlights:
- Revenue: $1.13 billion vs analyst estimates of $1.10 billion (10.5% year-on-year growth, 2.4% beat)
- Adjusted EPS: $0.01 vs analyst expectations of $0.04 (77.3% miss)
- Adjusted EBITDA: $95.5 million vs analyst estimates of $107.3 million (8.5% margin, 11% miss)
- Management reiterated its full-year Adjusted EPS guidance of $1.33 at the midpoint
- Operating Margin: 1.3%, down from 7.8% in the same quarter last year
- Market Capitalization: $4.21 billion
While we enjoy listening to the management’s commentary, our favorite part of earnings calls is the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Mattel’s Q2 Earnings Call
- Arpine Kocharyan (UBS) inquired about margin improvement in the second half and volatility in input costs. CFO Paul Ruh explained that gross margin is expected to improve sequentially due to reduced promotional activity and integration of Mattel163.
- Anthony Bonadio (Wells Fargo) asked about shifting $40 million in user acquisition spend to 2027. Ruh clarified that the change will not affect 2026 guidance, as investments are tied to the commercial launch of UNO Wild.
- Eric Handler (ROTH Capital) questioned the outlook for Masters of the Universe after a mixed theatrical performance. CEO Ynon Kreiz responded that streaming success drove significant brand engagement, tripling gross billings year-to-date.
- James Chartier (Monness, Crespi, Hardt) focused on growth prospects for Little People. Stanichi stated that strong partnerships and cross-generational appeal are positioning the brand as a meaningful growth driver, with Thomas & Friends also being relaunched.
- Christopher Horvers (JPMorgan) probed the impact of potential tariff refunds and Mattel163’s margin contribution. Ruh said guidance excludes any benefit from tariff refunds and that Mattel163’s results are in line with expectations for margin enhancement.
Catalysts in Upcoming Quarters
Looking forward, the StockStory team will be monitoring (1) the commercial launch of new digital and mobile games, particularly UNO Wild, (2) the performance of key entertainment releases such as the Matchbox film and their effect on toy sales, and (3) the stabilization of U.S. retail order patterns and inventory levels. Additional catalysts include the success of Barbie content initiatives and potential cost savings from the Optimizing for Profitable Growth program.
Mattel currently trades at $14.62, down from $14.86 just before the earnings. Is the company at an inflection point that warrants a buy or sell? Find out in our full research report (it’s free).
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