Mattel (MAT) Q2 FY26 earnings call: guidance and Q&A

Clarification on the unchanged full-year revenue guidance despite Q2 performance, and the expectation for gross margin to be above 50% in the back half, especially considering input costs and Middle East events.

Paul Ruh reiterated the full-year guidance, noting that the first half was in line with expectations and the majority of sales occur in the second half. He confirmed the approximately 50% gross margin target for FY26, expecting sequential improvement in H2 due to no heavy promotional activities like late 2025 and the contribution from Mattel163. He also stated plans to mitigate inflationary pressures from Middle East events.

“For the balance of the year, we are expecting to improve sequentially for the second half. And we do not foresee any of the promotional activities that we saw at the end of 2025 and also the inclusion of Mattel163.”

asked by Arpine Kocharyan · answered by Paul Ruh

Inquiring about the implications of Roberto Stanichi's promotion to President and Chief Brand Officer, particularly for the Barbie brand's strategy and future outlook.

Ynon Kreiz explained Roberto's promotion aligns with the brand-centric operating model to manage brands holistically. Roberto Stanichi detailed the Barbie strategy: H2 2026 improvements driven by increased content investment (doubling YouTube, new Nutcracker special), new product launches (Dreamhouse), and new packaging. He expects Barbie to return to growth in 2027, focusing on fashion icon status, enhanced product value, and accelerating adult fan engagement, drawing parallels to the successful Hot Wheels methodology.

“So when you put all of those things together and many more other initiatives, we do expect those trends to start to improve. And then for Barbie to return to growth in 2027.”

asked by Arpine Kocharyan · answered by Roberto Stanichi

Seeking clarification on the decision to shift $40 million in user acquisition spending to 2027 and its impact on 2026 guidance, particularly regarding gross margin.

Paul Ruh clarified that the $40 million digital performance marketing investment is being deployed to coincide with the UNO Wild commercial launch in early 2027. This shift is not expected to impact 2026 full-year guidance because the guidance already includes a range of assumptions, and investments are modulated for highest return. The full P&L impact was always expected in 2027.

“We now plan to deploy the majority of the $40 million of digital performance marketing investments to coincide with the commercial launch of UNO Wild in 2027. This is not expected to impact our full year guidance for 2026 because our guidance always includes a range of assumptions and scenario.”

asked by Anthony Bonadio · answered by Paul Ruh

Questioning the future of the Masters of the Universe franchise given the movie's theatrical performance, and how Mattel views its success beyond box office.

Ynon Kreiz emphasized that the Masters of the Universe movie was the #1 film on Amazon Prime Video globally and #1 most-watched across all US streaming platforms in its first week, indicating strong reception. He stated that the brand's gross billings have more than tripled year-to-date due to the movie's halo effect, making it an important action figure franchise for Mattel's future. He highlighted that box office is just one aspect, and the overall impact on igniting the franchise and delighting fans is key to their IP-driven strategy.

“In the first week, the movie was both #1 -- the #1 film on Amazon Prime Video globally as well as the #1 most watched movie across all streaming platforms in the U.S. So very strong reception.”

asked by Eric Handler · answered by Ynon Kreiz

Seeking an update on the outlook for tariff refunds, how Mattel plans to account for them, and potential use of proceeds, including investment in price or backing out prior period numbers.

Paul Ruh stated that Mattel is actively engaged in the refund process, but the timing and amount remain uncertain. He stressed that the company's guidance does not include any potential impact of tariff refunds. Mattel will evaluate and communicate the use of any refunds when they are received.

“I want to stress this point that our guidance does not include any potential impact of tariff refunds. So we're not projecting a specific refund amount, and we will continue to evaluate and consider the use of the refunds when they are received.”

asked by Christopher Horvers · answered by Paul Ruh

Inquiring about the top-line opportunity for 2027, given the expected growth in Barbie, continued strength in Hot Wheels, digital acquisitions, and new IP.

Ynon Kreiz described 2027 as a "big year" for the company, anticipating continued growth in Vehicles, Barbie returning to growth, a much lesser drag from ITPS, and strong performance from Challenger categories (Action Figures, Building Sets, Games). He also highlighted new IP additions like Teenage Mutant Ninja Turtles, Frozen 3, and DC, along with four self-published mobile games in the market. Mattel expects mid- to high single-digit top-line growth and strong double-digit bottom-line growth in 2027 and beyond.

“We have said already that we expect to see mid- to high single-digit growth in top line and strong double-digit growth in bottom line.”

asked by James Hardiman · answered by Ynon Kreiz