Mattel (MAT) investor relations material

Executive summary

• Net sales grew 4% year-over-year to $862 million in Q1 2026, driven by strong Vehicles and Challenger categories, with international growth offsetting a decline in North America.

• Gross margin declined 450 bps to 44.9%-45.1% due to tariffs, FX, and inflation, partially offset by cost savings initiatives.

• Net income was $61 million, reversing a prior year loss, primarily due to a $147.9-$148 million gain from the Mattel163 acquisition.

• Completed acquisition of the remaining 50% of Mattel163, advancing digital games strategy and resulting in full consolidation.

• $200 million in share repurchases completed in Q1, with $1.4 billion repurchased since 2023.

Financial highlights

• Adjusted gross margin declined to 45.1% (down 450-460 bps YoY); adjusted operating loss was $70 million (vs. $8 million loss prior year).

• Adjusted EPS was a loss of $0.20, down $0.18 from the prior year.

• Adjusted EBITDA was a loss of $12 million compared to a gain of $57 million last year.

• Free cash flow (TTM) was $335 million, down from $582 million, mainly due to lower net income.

• Cash and equivalents at quarter end: $866 million; net debt increased to $1.47 billion.

Outlook and guidance

• 2026 net sales guidance unchanged: 3%-6% growth in constant currency; adjusted gross margin expected at ~50% for the full year.

• Adjusted operating income guidance: $580M-$630M; adjusted EPS: $1.27-$1.39.

• Vehicles and challenger categories expected to grow strongly; dolls comparable; ITPS to decline.

• OPG program cost savings target raised to $225 million annualized by end of 2026.

• Guidance subject to market volatility, macroeconomic risks, and geopolitical uncertainties.