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The call presented a mixed picture: solid top‑line progress, strong brand and international momentum, strategic progress on digital gaming and entertainment IP, and continued capital returns. Those positives were offset by meaningful margin compression, Q1 profitability losses, weaker free cash flow and notable declines in Barbie and the infant/preschool category. Management reiterated full‑year revenue guidance and expects margin improvement over the year, but near‑term profitability and tariff-related risks weigh on the tone.
Mattel reiterated full‑year 2026 guidance calling for net sales growth of 3%–6% in constant currency (with current spot rates implying a 1–2 ppt FX tailwind on reported sales), an adjusted gross margin of approximately 50% for the year (Q2 expected to improve sequentially but remain below 50%), adjusted operating income of $580M–$630M (including a $30M recast adjustment) and adjusted EPS of $1.27–$1.39. Management expects vehicles and challenger categories to grow strongly, ITPS to decline, and continues $150M of strategic investments in 2026 (about $110M excluding ~$40M of user‑acquisition spend) that it says will be net‑positive to the P&L in 2027; it also expects 2027 revenue to grow mid‑ to high‑single digits in constant currency with strong double‑digit adjusted operating income growth. Capital allocation and balance‑sheet context in the guidance: target $400M of share repurchases this year (Q1 repurchase $200M; $1.4B repurchased since 2023, ~21% fewer shares outstanding), trailing‑12‑month free cash flow $335M, cash $866M at quarter end and gross leverage ~2.7x.
Net sales of $862 million, up 4% as reported and 1% in constant currency; total gross billings +2% in constant currency; global POS up mid‑single digits, indicating stronger consumer demand and a better-than-expected start to the year.
Vehicles category gross billings +13%; Hot Wheels and Disney/Pixar Cars each grew double digits; Mattel gained share in vehicles and action figures per Circana and was #1 globally in dolls, vehicles and infant/preschool categories.
Several owned and partner brands grew double digits, including Hot Wheels, Uno, Monster High, and resurgence picks like Masters of the Universe; Mattel Brick Shop is rapidly expanding and growing double digits following launch.
Closed acquisition of remaining 50% of Mattel 163 to fully own mobile games studio; first self‑published mobile game (Masters of the Universe) in soft launch ahead of June 5 theatrical release, second mobile game in advanced development; strong engagement on branded digital experiences (Barbie Dreamhouse Tycoon on Roblox ranked top 10; UNO experience strong on Fortnite).
Repurchased $200 million of shares in the quarter and $1.4 billion since 2023 (approximate 21% reduction in shares outstanding); continue to expect $400 million in buybacks this year under a $1.5 billion authorization.
Gross billings in international markets up 8% with growth across EMEA, Latin America and Asia Pacific, partially offsetting a North America gross billings decline of 4%.
Optimizing for Profitable Growth program delivered $16 million of savings in the quarter, bringing program savings to date to $189 million toward a $225 million target for 2024–2026.
Reiterated full‑year 2026 net sales guidance of +3% to +6% in constant currency and continued to expect adjusted gross margin of ~50% for the year; 2027 outlook calls for mid‑ to high‑single digit revenue growth and strong double‑digit adjusted operating income growth driven by strategic investments.
Hello, and thank you for standing by. My name is Tiffany, and I will be your conference operator today. At this time, I would like to welcome everyone to the Mattel, Inc. First Quarter 2026 Earnings Conference Call. [Operator Instructions] I would now like to turn the call over to Jen Kettnich, Vice President and Head of Investor Relations for Mattel. Jen, please go ahead.
Thank you, operator, and good afternoon, everyone. Joining me today are Ynon Kreiz, Mattel's Chairman and Chief Executive Officer; and Paul Ruh, Mattel's Chief Financial Officer. This afternoon, we reported Mattel's First Quarter 2026 financial results. We will begin today's call with Ynon and Paul providing commentary on our results, after which, we will provide some time for questions. Please note that during the question-and-answer session, we respectfully ask that you limit to 1 question and 1 follow-up so that we can get to as many analysts and questions as possible today. Today's discussion, earnings release and slide presentation may reference certain non-GAAP financial measures and key performance indicators, which are defined in the slide presentation and earnings release appendices. Please note that gross billings figures referenced on this call will be stated in constant currency unless stated otherwise. Our earnings release, slide presentation and supplemental non-GAAP information can be accessed through the Investors section of our corporate website, corporate.mattel.com.
And the information required by Regulation G regarding non-GAAP financial measures as well as information regarding our ke...
