MATTEL INC /DE/ - Quarter Report: 2025 June (Form 10-Q)

Common
StockAdditional
Paid-In
CapitalTreasury
StockRetained
EarningsAccumulated
Other
Comprehensive
LossTotal
Stockholders'
Equity (Unaudited; in thousands)Balance, December 31, 2023$ $ $()$ $()$ Net loss— — — ()— ()Other comprehensive loss, net of tax— — — — ()()Share repurchases— — ()— — ()Issuance of treasury stock for stock option exercises— () — — Issuance of treasury stock for restricted stock units vesting— () — — ()Share-based compensation— — — — Balance, March 31, 2024$ $ $()$ $()$ Net income— — — — Other comprehensive loss, net of tax— — — — ()()Share repurchases— — ()— — ()Issuance of treasury stock for stock option exercises— () — — Issuance of treasury stock for restricted stock units vesting— () — — ()Deferred compensation— () — — Share-based compensation— — — — Balance, June 30, 2024$ $ $()$ $()$

Derivatives Not Designated as Hedging Instruments

For the Six Months Ended

June 30,
2025

June 30,
2024

Statements of
Operations
Classification

(In thousands)

Amount of Net Gains (Losses) Recognized in the Statements of Operations:

Foreign currency forward exchange and other contracts

Other non-operating income/expense, net

The net gains and losses recognized in the consolidated statements of operations during the three and six months ended June 30, 2025 and June 30, 2024, respectively, were offset by foreign currency transaction gains and losses on the related derivative balances.

13.

$ $ $ Liabilities:Foreign currency forward exchange and other contracts (a)$ $ $ $ June 30, 2024Level 1Level 2Level 3Total(In thousands)Assets:Foreign currency forward exchange and other contracts (a)$ $ $ $ Liabilities:Foreign currency forward exchange and other contracts (a)$ $ $ $ December 31, 2024Level 1Level 2Level 3Total(In thousands)Assets:Foreign currency forward exchange and other contracts (a)$ $ $ $ Liabilities:Foreign currency forward exchange and other contracts (a)$ $ $ $

(a)The fair value of the foreign currency forward exchange and other contracts was based on dealer quotes of market forward rates and reflects the amount that Mattel would receive or pay at their maturity dates for contracts involving the same notional amounts, currencies, and maturity dates.

Other Financial Instruments

Mattel's financial instruments included cash and equivalents, accounts receivable and payable, accrued liabilities, short-term borrowings, and long-term debt. The fair values of these instruments, excluding long-term debt, approximate their carrying amounts because of their short-term nature. Cash and equivalents were classified as Level 1 and all other financial instruments were classified as Level 2 within the fair value hierarchy.

billion (compared to a carrying amount of $ billion) as of June 30, 2025, $ billion (compared to a carrying amount of $ billion) as of June 30, 2024, and $ billion (compared to a carrying amount of $ billion) as of December 31, 2024. The estimated fair values have been calculated based on broker quotes or rates for the same or similar instruments and were classified as Level 2 within the fair value hierarchy.

14.

$ $ $ Weighted-average number of common shares Basic net income per common share$ $ $ $ Diluted:Net income$ $ $ $ Weighted-average number of common shares Dilutive share-based awards (a) Weighted-average number of common and potential common shares Diluted net income per common share$ $ $ $

million and million, respectively, were excluded from the calculation of diluted net income per common share because their effect would be antidilutive. For each of the three and six months ended June 30, 2024, share-based awards totaling million were excluded from the calculation of diluted net income per common share because their effect would be antidilutive.

15.

$ $ $ Interest cost Expected return on plan assets()()()()Amortization of prior service cost Recognized actuarial loss Net periodic benefit cost$ $ $ $

$ $ $ Amortization of prior service credit()()()()Recognized actuarial gain()()()()Net periodic benefit credit$()$()$()$()

Mattel's service cost component is recorded within operating income while other components of net periodic benefit costs for defined benefit pension and postretirement benefit plans are recorded within other non-operating (income) expense, net.

During the six months ended June 30, 2025, Mattel made cash contributions totaling approximately $ million related to its defined benefit pension and postretirement benefit plans. During the remainder of 2025, Mattel expects to make additional cash contributions of approximately $ million.

16.

from the grant date. Stock options, RSUs, and performance awards related to Mattel's long-term incentive program generally provide for vesting over, or at the end of, a period of from the grant date.

On May 21, 2025, annual performance awards were granted to officers and key employees of Mattel under the 2025-2027 Long-Term Incentive Program ("LTIP"). Under the 2025-2027 LTIP, shares of Mattel's common stock may be earned based on Mattel’s relative Total Shareholder Return ("relative TSR") over the performance measurement period. Performance awards previously granted under Mattel’s LTIP in place during the six months ended June 30, 2025 and 2024, may be earned based on Mattel's performance against cumulative Adjusted Free Cash Flow targets, with the final payout subject to modification based on Mattel's relative TSR over the same periods. The actual number of shares earned under both the 2025 LTIP and prior LTIP awards may range from % to % of the target award, depending on performance against the applicable metrics.

On September 30, 2024, a one-time retention performance award was granted to Ynon Kreiz, Mattel's Chief Executive Officer, which vests over a period of from the grant date, subject to potential acceleration upon certain qualifying terminations of employment.

$ $ $ RSU compensation expense Performance award compensation expense $ $ $ $

million and is expected to be recognized over a weighted-average period of years.

Mattel uses treasury shares purchased under its share repurchase program to satisfy stock option exercises and the vesting of RSUs and performance awards. Cash received for stock option exercises, net of taxes, was $ million for each of the six months ended June 30, 2025 and 2024.

17.

$ $ $ Identifiable intangible asset amortization

18.

$ $ $ Other selling and administrative expenses (b) $ $ $ $

(a)Severance and other restructuring charges recorded within cost of sales in the consolidated statements of operations are included in segment operating income in "Note 21 to the Consolidated Financial Statements—Segment Information."

(b)Severance and other restructuring charges recorded within other selling and administrative expenses in the consolidated statements of operations are included in corporate and other expense in "Note 21 to the Consolidated Financial Statements—Segment Information."

$ $()$ Other restructuring charges (a) () $ $ $()$

(a)Other restructuring charges consist primarily of expenses associated with the consolidation of manufacturing and distribution facilities.

As of June 30, 2025, in connection with the OPG program, Mattel recorded cumulative severance and other restructuring charges of approximately $ million, which included approximately $ million of non-cash charges. Total expected cash expenditures are approximately $ to $ million and total non-cash charges are expected to be up to $ million.

19.

million and a benefit of $ million for the three and six months ended June 30, 2025, respectively, and an expense of $ million and a benefit of $ million for the three and six months ended June 30, 2024, respectively. Mattel recognized a net discrete income tax expense of $ million during the three months ended June 30, 2025. Mattel recognized a net discrete income tax benefit of $ million during the six months ended June 30, 2025, primarily related to a change of its indefinite reinvestment assertion relating to certain foreign subsidiary earnings. Mattel recognized a net discrete income tax benefit of $ million during the three months ended June 30, 2024, primarily related to previously unrecognized tax benefits. Mattel recognized a net discrete income tax benefit of $ million during the six months ended June 30, 2024, primarily related to tax elections filed to amortize certain intangible assets transferred as part of Mattel's intra-group intellectual property rights transfer and previously unrecognized tax benefits.

Evaluating the need for and the amount of a valuation allowance for deferred tax assets often requires significant judgment and extensive analysis of all available evidence to determine whether it is more-likely-than-not that these assets will be realizable. Mattel routinely assesses the positive and negative evidence for this realizability, including the evaluation of sustained profitability and three years of cumulative pretax income for each tax jurisdiction. For the three and six months ended June 30, 2025 and 2024, there were no material changes to Mattel's valuation allowance.

In the normal course of business, Mattel is regularly audited by federal, state, and foreign tax authorities. Based on the current status of federal, state, and foreign audits, Mattel believes it is reasonably possible that in the next 12 months, the total unrecognized tax benefits could decrease by $ million related to the settlement of tax audits and/or the expiration of statutes of limitations. The ultimate settlement of any particular issue with the applicable taxing authority could have a material impact on Mattel's consolidated financial statements.

On July 4, 2025, H.R.1- the One Big Beautiful Bill Act ("OBBBA") was enacted in the United States. The OBBBA contains significant provisions, including the permanent extension or restoration of certain expiring corporate income tax provisions, originally introduced by the Tax Cuts and Jobs Act of 2017, and incremental modifications to the international tax framework. The legislation has multiple effective dates, with certain provisions effective for the tax year beginning after December 31, 2024, and others effective for tax years beginning after December 31, 2025. Mattel is currently evaluating the provisions of the OBBBA to determine the impact on its consolidated financial statements. The effects of the OBBBA will be recorded in the third quarter of 2025, as a change in tax law is accounted for in the period of enactment.

20.

statewide consumer classes comprised of those who purchased the Sleeper as marketed as safe for prolonged and overnight sleep. The class actions were consolidated before a single judge in the United States District Court for the Western District of New York for pre-trial purposes pursuant to the U.S. federal courts' Multi-District Litigation program. In July 2024, the parties filed a settlement agreement with the court to resolve this litigation. In August 2024, the court preliminarily approved, and Mattel paid, the settlement amount, which was not material. In February 2025, the court granted final approval of the settlement.

products liability lawsuits filed between April 2019 and September 2024 are pending against Fisher-Price, Inc. and Mattel, Inc. alleging that a product defect in the Sleeper caused the fatalities of or injuries to children. More than lawsuits have been settled and/or dismissed. As of June 30, 2025, Mattel assessed its probable loss related to these matters and has accrued estimated liabilities where appropriate, which are not material. Additionally, Fisher-Price, Inc. and/or Mattel, Inc. have also received letters from lawyers purporting to represent additional plaintiffs who have threatened to assert similar claims.

In addition, a stockholder filed a derivative action in the Court of Chancery for the State of Delaware (Kumar v. Bradley, et al., filed July 7, 2020) alleging breach of fiduciary duty and unjust enrichment related to the development, marketing, and sale of the Sleeper. The defendants in the derivative action included certain of Mattel's current and former officers and directors. In August 2021, a second similar derivative action was filed in the Court of Chancery for the State of Delaware (Armon v. Bradley, et al., filed August 30, 2021). The parties reached a settlement in principle of this litigation, which was approved by the court in April 2025. As of June 30, 2025, Mattel has received its portion of the settlement, which is not material.

The lawsuits seek compensatory damages, punitive damages, statutory damages, restitution, disgorgement, attorneys' fees, costs, interest, declaratory relief, and/or injunctive relief. As noted above, Mattel has reached settlements in some of these lawsuits, and in the ongoing cases, Mattel believes that it has substantial defenses to the allegations made and intends to vigorously defend against them.

Insurance Litigation

On January 6, 2023, Mattel, Inc. and Fisher-Price, Inc. filed a lawsuit against their products liability insurers in the Superior Court of the State of Delaware seeking a declaratory judgment regarding the obligations of the insurers to defend and indemnify Mattel for the Sleeper products liability lawsuits. On March 28, 2025 and June 2, 2025, the court issued summary judgment rulings which determined, among other things, that the Sleeper products liability claims constitute a single occurrence under Mattel’s insurance policies, and that each claim is allocated to the policy year in which the incident occurred. As of June 30, 2025, Mattel assessed its probable loss related to this matter and has accrued an estimated liability, which is not material.

21.

$ $ $ $ Cost of sales (a) () Gross Profit Advertising and promotion expenses Other selling and administrative expenses (b) Operating Income (Loss) () Interest expense Interest (income)()()Other non-operating expense, net()()Income (Loss) Before Income Taxes$

(a)Cost of sales included severance and other restructuring charges of approximately $ million which was allocated to the North America and International segments.

(b)Other selling and administrative expenses included severance and other restructuring charges, the impact of inclined sleeper product recall litigation, incentive compensation, and share-based compensation of approximately $ million, $ million, $ million, and $ million, respectively, which were recorded in corporate and other.

(a)Cost of sales included severance and other restructuring charges of approximately $ million which was allocated to the North America and International segments.

For the Three Months Ended June 30, 2024

North America

International

Total Reportable Segments

Corporate
and other

Consolidated

(In thousands)

Net Sales

Cost of sales (a)

()

Gross Profit

Advertising and promotion expenses

Other selling and administrative expenses (b)

Operating Income (Loss)

()

Interest expense

Interest (income)

()

Other non-operating expense, net

Income (Loss) Before Income Taxes

(a)Cost of sales included severance and other restructuring charges of approximately $ million which was allocated to the North America and International segments.

$ $ $ International Corporate and other Depreciation and amortization$ $ $ $

$ $ International Corporate and other Accounts receivable, net and inventories$ $ $

$ $ $ InternationalEMEA Latin America Asia Pacific Total International Net sales$ $ $ $

22.

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.

In the discussion that follows, "Mattel" refers to Mattel, Inc. and/or one or more of its subsidiaries.

The following discussion should be read in conjunction with the consolidated financial statements and the related notes that appear in Part I, Item 1 "Financial Statements" of this Quarterly Report on Form 10-Q. Mattel's business is seasonal with consumers making a large percentage of all toy purchases during the traditional holiday season; therefore, results of operations are most comparable to corresponding periods.

The following discussion includes currency exchange rate impact, a non-GAAP financial measure within the meaning of Regulation G promulgated by the SEC ("Regulation G"), to supplement the financial results as reported in accordance with GAAP. The currency exchange rate impact reflects the portion (expressed as a percentage) of changes in Mattel's reported results that are attributable to fluctuations in currency exchange rates. Mattel uses this non-GAAP financial measure to analyze its continuing operations and to monitor, assess, and identify meaningful trends in its operating and financial performance. Management believes that the disclosure of this non-GAAP financial measure provides useful supplemental information to investors to allow them to better evaluate ongoing business performance and certain components of Mattel's results. This measure is not, and should not be viewed as, a substitute for GAAP financial measures.

The following discussion also includes the use of gross billings, a key performance indicator. Gross billings represent amounts invoiced to customers. It does not include the impact of sales adjustments, such as trade discounts and other allowances. Mattel presents changes in gross billings as a metric for comparing its aggregate, categorical, brand, and geographic results to highlight significant trends in Mattel's business. Changes in gross billings are discussed because, while Mattel records the details of sales adjustments in its financial accounting systems at the time of sale, such sales adjustments are generally recorded by customer and not associated with categories, brands, or individual products.

Amounts shown in millions or billions within this Item 2 may not sum due to rounding.

Overview

Mattel is a leading global toy and family entertainment company and owner of one of the most iconic brand portfolios in the world. Mattel creates innovative products and experiences that inspire fans, entertain audiences, and develop children through play. Mattel is focused on the following strategy to grow its intellectual property ("IP") driven toy business and expand its entertainment offering:

•Grow toy business profitably through scaling Mattel's portfolio, optimizing operations, evolving demand creation, and growing franchise brands; and

•Expand entertainment offering to capture the full value of Mattel's IP outside the toy aisle in highly accretive business verticals, by growing franchise brands and accelerating content, consumer products, and digital and live experiences.

Mattel is the owner of a portfolio of iconic brands and partners with global entertainment companies to license other IP. Mattel's portfolio of owned and licensed brands and products are organized into the following categories:

Dolls—including brands such as Barbie, American Girl, Disney Princess, Disney Frozen, Monster High, and Polly Pocket. Mattel's Dolls portfolio is driven by the flagship Barbie brand and a collection of complementary brands offered globally. Empowering girls since 1959, Barbie has inspired the limitless potential of every girl by showing them that they can be anything. Monster High, a character-driven franchise, engages fans of all ages, encouraging them to be their authentic selves and celebrate what makes them unique. American Girl, with an extensive portfolio of dolls and accessories, content, gaming, and lifestyle products, is best known for imparting valuable life lessons that instill confidence through its inspiring dolls and books, featuring characters from past and present.

Infant, Toddler, and Preschool—including brands such as Fisher-Price (including Little People and Fisher-Price Wood), Imaginext, and Thomas & Friends. As a leader in play and child development, Fisher-Price is dedicated to giving families the best possible start to life by making the most fun, enriching products for infants, toddlers, and preschoolers. Thomas & Friends is an award-winning preschool train brand franchise that lays the tracks to inspire, entertain, and develop young train fans through toys, content, live events, and other consumer products.

Infant, Toddler, and Preschool is further divided into three subcategories. The first subcategory is Fisher-Price, the power brand, which includes the core Infant, Little People, and Newborn product lines, as well as the recently launched Fisher-Price Wood product line. The second subcategory is Preschool Entertainment, which includes owned IP such as Thomas & Friends and Barney, Mattel's character based Imaginext line, and partner entertainment brands. The third subcategory is Baby Gear and Power Wheels, in which Mattel is strategically out-licensing or exiting certain product lines.

Vehicles—including brands such as Hot Wheels (including Hot Wheels Monster Trucks and Hot Wheels RC), Matchbox, and Cars (Disney Pixar). In production for over 50 years, Hot Wheels continues to push the limits of performance and design, and ignites and nurtures the challenger spirit of kids, adults, and collectors. From die-cast vehicles to tracks, playsets, and accessories, the Mattel Vehicles portfolio has broad appeal that engages and excites fans of all ages.

Action Figures, Building Sets, Games, and Other—including brands such as Masters of the Universe, MEGA, UNO, Jurassic World (NBCUniversal), Minecraft (Microsoft), WWE, and Star Wars (Disney's Lucasfilm). Mattel's Action Figures portfolio is comprised of product lines associated with licensed entertainment franchises, such as Jurassic World and WWE, as well as product lines from Mattel-owned IP, such as Masters of the Universe. As the challenger brand in Building Sets, MEGA inspires creativity through authentic building experiences for builders of all ages and fans of global franchises. Within Games, UNO is the classic matching card game that is easy to learn and fast fun for everyone. Other includes Plush, which contains products associated with movie releases from licensed entertainment franchises, as well as Mattel-owned IP.

Recent Developments

During the second quarter of 2025, Mattel continued executing its multi-year strategy to grow its IP-driven toy business and expand its entertainment offering, achieving strong international growth and expanding gross margin, while the U.S. business was impacted by global trade dynamics and timing shifts, particularly delays in retailer ordering patterns in light of tariff uncertainty.

Mattel's net sales in the second quarter of 2025 decreased 6% compared to the second quarter of 2024. Gross margin expanded to 50.9% in the second quarter of 2025, as compared to 49.2% in the second quarter of 2024, with savings from the OPG program, lower inventory management costs, favorable mix and other favorability due to supply chain efficiencies, partially offset by cost inflation. Net income per common share was $0.16 for the second quarter of 2025, as compared to $0.17 in the second quarter of 2024. Additionally, Mattel ended the second quarter with a cash balance of $870.5 million, as compared to $722.4 million in the second quarter of 2024 after $410.0 million of share repurchases during the trailing twelve months.

U.S. global trade policy continues to evolve with significant tariffs imposed or proposed on imports from China, Vietnam, Mexico, and other countries. There is substantial uncertainty about the duration of existing tariffs, potential changes or pauses to such tariffs, tariff levels, and whether additional tariffs or other retaliatory actions may be imposed, modified, or suspended, and the impacts of such actions on Mattel's business. Mattel continues to monitor and evaluate these developments and assess their potential impact on Mattel’s business and operations.

Mattel is operating in an uncertain macro-economic environment with significant volatility that may impact consumer demand. To the extent the macro-economic environment worsens, it may have a material effect on Mattel's results of operations and financial condition. Refer to Part I, Item 1A "Risk Factors" in the 2024 Annual Report and Part II, Item 1A "Risk Factors" in the Quarterly Report on Form 10-Q for the three months ended March 31, 2025 for further discussion regarding potential impacts on Mattel's business.

Results of Operations—Second Quarter

Consolidated Results

The following table presents Mattel's consolidated results for the second quarter of 2025 and 2024:


	For the Three Months Ended								Year/Year Change
	June 30, 2025				June 30, 2024
	Amount		% of Net Sales		Amount		% of Net Sales		%		Basis Points of Net Sales
	(In millions, except percentage and basis point information)
Net sales	$	1,018.6			$	1,079.7			-6	%
Cost of sales	499.6		49.1	%	549.0		50.8	%	-9	%	(170)
Gross profit	519.0		50.9	%	530.7		49.2	%	-2	%	170
Advertising and promotion expenses	79.1		7.8	%	73.7		6.8	%	7	%	100
Other selling and administrative expenses	361.3		35.5	%	373.8		34.6	%	-3	%	90
Operating income	78.5		7.7	%	83.2		7.7	%	-6	%	—
Interest expense	29.4		2.9	%	30.0		2.8	%	-2	%	10
Interest (income)	(12.4)		-1.2	%	(12.4)		-1.1	%	—	%	(10)
Other non-operating (income) expense, net	(1.4)				6.1
Income before income taxes	62.9		6.2	%	59.5		5.5	%	6	%	70
Provision for income taxes	16.2				9.2
(Income) from equity method investments	(6.6)				(6.5)
Net income	$	53.4	5.2	%	$	56.9	5.3	%	-6	%	(10)

Sales

Net sales in the second quarter of 2025 were $1.02 billion, a decrease of $61.2 million, or 6%, as compared to $1.08 billion in the second quarter of 2024. The decrease in net sales was due to a decrease in gross billings of $50.9 million and an increase in sales adjustments of $10.3 million.

Gross billings represent amounts invoiced to a customer and do not include the impact of sales adjustments, such as trade discounts and other allowances. Changes in gross billings are discussed below because, while Mattel records the details of sales adjustments in its financial accounting systems at the time of sale, such sales adjustments are generally recorded by customer and are not associated with categories, brands, or individual products. The following tables provide a summary of Mattel's consolidated gross billings by categories, along with supplemental information by brand, for the second quarter of 2025 and 2024:


	For the Three Months Ended				% Change as Reported		Currency Exchange Rate Impact
	June 30, 2025		June 30, 2024
	(In millions, except percentage information)
Gross Billings by Categories
Dolls	$	335.2	$	414.0	-19	%	—	%
Infant, Toddler, and Preschool	143.4		190.3		-25	%	—	%
Vehicles	407.5		369.7		10	%	—	%
Action Figures, Building Sets, Games, and Other	264.5		227.3		16	%	—	%
Gross Billings	$	1,150.5	$	1,201.3	-4	%	—	%

Supplemental Gross Billings Disclosure
Gross Billings by Top 3 Power Brands
Barbie	$	200.7	$	266.1	-25	%	—	%
Hot Wheels	357.3		327.4		9	%	—	%
Fisher-Price	107.8		135.9		-21	%	—	%
Other	484.7		471.9		3	%	—	%
Gross Billings	$	1,150.5	$	1,201.3	-4	%	—	%

Gross billings were $1.15 billion in the second quarter of 2025, a decrease of $50.9 million, or 4%, as compared to $1.20 billion in the second quarter of 2024. The decrease in gross billings was primarily due to lower billings of Dolls and Infant, Toddler, and Preschool products, partially offset by higher billings of Vehicles and Action Figures, Building Sets, Games, and Other products.

Dolls gross billings decreased 19%, of which 16% was due to lower billings of Barbie products and 2% was due to lower billings of Monster High products.

Infant, Toddler, and Preschool gross billings decreased 25%, of which 15% was due to lower billings of Fisher-Price products and 7% was due to lower billings of Baby Gear and Power Wheels products, due to the continued strategic exit from certain product lines in Baby Gear and Power Wheels.

Vehicles gross billings increased 10%, primarily due to higher billings of Hot Wheels products.

Action Figures, Building Sets, Games, and Other gross billings increased 16%, of which 27% was due to higher billings of Action Figures products, primarily due to higher billings of Jurassic World and Minecraft products in connection with their theatrical releases in 2025, partially offset by lower billings of Building Sets products of 8%.

Sales adjustments generally represent arrangements with Mattel's customers to provide sales incentives, support customer promotions, and provide allowances for returns and defective merchandise. Such programs are based primarily on customer purchases, customer performance of specified promotional activities, and other specified factors such as sales to consumers. Additionally, sales adjustments may include foreign currency transaction gains and losses from the remeasurement of accounts receivable denominated in currencies that are different from the relevant entity's functional currency. Sales adjustments increased to $131.9 million in the second quarter of 2025, from $121.6 million in the second quarter of 2024. Sales adjustments as a percentage of net sales increased to 12.9% in the second quarter of 2025, as compared to 11.3% in the second quarter of 2024 primarily due to higher promotional activities and a shift in sales channel mix resulting in a higher proportion of sales with higher average sales adjustment rates.

Cost of Sales

Cost of sales decreased by $49.4 million, or 9%, to $499.6 million in the second quarter of 2025 from $549.0 million in the second quarter of 2024. Within cost of sales, product and other costs decreased by $49.2 million, or 12%, to $376.9 million in the second quarter of 2025 from $426.2 million in the second quarter of 2024. Freight and logistics expenses decreased by $3.6 million, or 5%, to $71.5 million in the second quarter of 2025, as compared to $75.2 million in the second quarter of 2024. Royalty expense increased by $3.5 million, or 7%, to $51.2 million in the second quarter of 2025 from $47.7 million in the second quarter of 2024.

Gross Margin

Gross margin increased to 50.9% in the second quarter of 2025 from 49.2% in the second quarter of 2024. The increase in gross margin was primarily due to incremental realized savings from the OPG program of 120 basis points, lower inventory management costs of 60 basis points, primarily driven by lower close-out sales, favorable mix of 60 basis points and other factors, including supply chain efficiencies of 40 basis points, partially offset by cost inflation of 110 basis points.

Advertising and Promotion Expenses

Advertising and promotion expenses primarily consist of: (i) media costs, which include the media, planning, and buying fees for television, print, and online advertisements, (ii) non-media costs, which include commercial and website production, merchandising, and promotional costs, (iii) retail advertising costs, which include consumer direct catalogs, and (iv) general advertising costs, which include trade show costs. Advertising and promotion expenses as a percentage of net sales increased to 7.8% in the second quarter of 2025, as compared to 6.8% in the second quarter of 2024. The increase in advertising and promotion expenses as a percentage of net sales was primarily due to a shift in the timing of advertising and promotion programs from the first quarter of 2025 to the second quarter of 2025.

Other Selling and Administrative Expenses

Other selling and administrative expenses were $361.3 million, or 35.5% of net sales, in the second quarter of 2025, a decrease of $12.5 million, as compared to $373.8 million, or 34.6% of net sales, in the second quarter of 2024. The decrease in other selling and administrative expenses was primarily due to realized savings from the OPG program of $10.8 million and lower severance and restructuring charges of $8.3 million.

Interest Expense

Interest expense was $29.4 million in the second quarter of 2025, relatively flat as compared to $30.0 million in the second quarter of 2024.

Interest Income

Interest income was $12.4 million in the second quarter of 2025, flat as compared to $12.4 million in the second quarter of 2024.

Provision for Income Taxes

Mattel's provision for income taxes was an expense of $16.2 million in the second quarter of 2025, as compared to $9.2 million in the second quarter of 2024. The increase in provision for income taxes was primarily due to a change in discrete income tax expense related to previously unrecognized tax benefits and higher income before income taxes. During the second quarter of 2025, Mattel recognized a net discrete income tax expense of $1.0 million. During the second quarter of 2024, Mattel recognized a net discrete tax benefit of $4.5 million, primarily related to previously unrecognized tax benefits.

Evaluating the need for and the amount of a valuation allowance for deferred tax assets often requires significant judgment and extensive analysis of all available evidence to determine whether it is more-likely-than-not that these assets will be realizable. Mattel routinely assesses the positive and negative evidence for this realizability, including the evaluation of sustained profitability and three years of cumulative pretax income for each tax jurisdiction. For the second quarter of 2025 and 2024, there were no material changes to Mattel's valuation allowance.

Segment Results

North America Segment

The following tables provide a summary of Mattel's net sales, segment operating income, and gross billings by categories, along with supplemental information by brand, for the North America segment for the second quarter of 2025 and 2024:


	For the Three Months Ended				% Change as Reported		Currency Exchange Rate Impact
	June 30, 2025		June 30, 2024
	(In millions, except percentage information)
Net Sales	$	510.8	$	606.5	-16	%	—	%
Segment Operating Income	93.8		136.9		-31	%

Net sales for the North America segment in the second quarter of 2025 were $510.8 million, a decrease of $95.7 million, or 16%, as compared to $606.5 million in the second quarter of 2024. The decrease in net sales was primarily due to a decrease in gross billings of $99.3 million.


	For the Three Months Ended				% Change as Reported		Currency Exchange Rate Impact
	June 30, 2025		June 30, 2024
	(In millions, except percentage information)
Gross Billings by Categories
Dolls	$	168.6	$	231.1	-27	%	—	%
Infant, Toddler, and Preschool	69.9		111.6		-37	%	—	%
Vehicles	174.8		166.8		5	%	—	%
Action Figures, Building Sets, Games, and Other	134.3		137.3		-2	%	—	%
Gross Billings	$	547.5	$	646.9	-15	%	—	%

Supplemental Gross Billings Disclosure
Gross Billings by Top 3 Power Brands
Barbie	$	91.8	$	140.0	-34	%	—	%
Hot Wheels	147.6		144.6		2	%	—	%
Fisher-Price	52.3		78.4		-33	%	—	%
Other	255.9		283.9		-10	%	—	%
Gross Billings	$	547.5	$	646.9	-15	%	—	%

Gross billings for the North America segment were $547.5 million in the second quarter of 2025, a decrease of $99.3 million, or 15%, as compared to $646.9 million in the second quarter of 2024. The decrease in the North America segment gross billings was due to lower billings of Dolls, Infant, Toddler, and Preschool, and Action Figures, Building Sets, Games, and Other products, partially offset by higher billings of Vehicles products.

Dolls gross billings decreased 27%, of which 21% was due to lower billings of Barbie products and 4% was due to lower billings of Monster High products.

Infant, Toddler, and Preschool gross billings decreased 37%, of which 23% was due to lower billings of Fisher-Price products, 10% was due to lower billings of Baby Gear and Power Wheels products, due to the continued strategic exit from certain product lines in Baby Gear and Power Wheels, and 4% was due to lower billings of Preschool Entertainment products.

Vehicles gross billings increased 5%, of which 2% was due to higher billings of Hot Wheels products and 1% was due to higher billings of Cars (Disney Pixar) products.

Action Figures, Building Sets, Games, and Other gross billings decreased 2%, of which 11% was due to lower billings of Building Sets products and 4% was due to lower billings of Games products, partially offset by higher billings of Action Figures products of 14%, primarily due to higher billings of Jurassic World and Minecraft products in connection with their theatrical releases in 2025.

Sales adjustments decreased to $36.7 million in the second quarter of 2025 from $40.4 million in the second quarter of 2024. Sales adjustments as a percentage of net sales were relatively consistent at 7.2% in the second quarter of 2025, as compared to 6.7% in the second quarter of 2024.

Cost of sales decreased by $54.1 million, or 17%, to $265.7 million in the second quarter of 2025 from $319.8 million in the second quarter of 2024, primarily due to a decrease in product and other costs of $49.1 million.

Gross margin increased to 48.0% in the second quarter of 2025 from 47.3% in the second quarter of 2024. The increase in gross margin was primarily due to incremental realized savings from the OPG program of 130 basis points, lower inventory management costs of 40 basis points, including lower close-out sales, partially offset by cost inflation of 80 basis points and unfavorable mix and other factors of 20 basis points.

North America segment operating income was $93.8 million in the second quarter of 2025, as compared to $136.9 million in the second quarter of 2024, primarily due to lower gross profit of $41.6 million.

International Segment

The following tables provide a summary of Mattel's net sales, segment operating income, and gross billings by categories, along with supplemental information by brand, for the International segment for the second quarter of 2025 and 2024:


	For the Three Months Ended				% Change as Reported		Currency Exchange Rate Impact
	June 30, 2025		June 30, 2024
	(In millions, except percentage information)
Net Sales	$	507.8	$	473.2	7	%	—	%
Segment Operating Income	114.9		77.3		49	%

Net sales for the International segment in the second quarter of 2025 were $507.8 million, an increase of $34.5 million, or 7%, as compared to $473.2 million in the second quarter of 2024. The increase in net sales was primarily due to an increase in gross billings of $48.5 million, partially offset by an increase in sales adjustments of $14.0 million.


	For the Three Months Ended				% Change as Reported		Currency Exchange Rate Impact
	June 30, 2025		June 30, 2024
	(In millions, except percentage information)
Gross Billings by Categories
Dolls	$	166.6	$	182.9	-9	%	—	%
Infant, Toddler, and Preschool	73.5		78.7		-7	%	-1	%
Vehicles	232.7		202.9		15	%	—	%
Action Figures, Building Sets, Games, and Other	130.2		90.0		45	%	1	%
Gross Billings	$	602.9	$	554.5	9	%	—	%

Supplemental Gross Billings Disclosure
Gross Billings by Top 3 Power Brands
Barbie	$	108.9	$	126.0	-14	%	—	%
Hot Wheels	209.7		182.9		15	%	—	%
Fisher-Price	55.5		57.6		-4	%	-2	%
Other	228.8		188.0		22	%	1	%
Gross Billings	$	602.9	$	554.5	9	%	—	%

Gross billings for the International segment were $602.9 million in the second quarter of 2025, an increase of $48.5 million, or 9%, as compared to $554.5 million in the second quarter of 2024. The increase in the International segment gross billings was due to higher billings of Action Figures, Building Sets, Games, and Other and Vehicles products, partially offset by lower billings of Dolls and Infant, Toddler, and Preschool products.

Dolls gross billings decreased 9%, primarily due to lower billings of Barbie products.

Infant, Toddler, and Preschool gross billings decreased 7%, of which 3% was due to lower billings of Baby Gear and Power Wheels products, due to the continued strategic exit from certain product lines in Baby Gear and Power Wheels, and 3% was due to lower billings of Fisher-Price products.

Vehicles gross billings increased 15%, primarily due to higher billings of Hot Wheels products.

Action Figures, Building Sets, Games, and Other gross billings increased 45%, of which 45% was due to higher billings of Action Figures products, primarily due to higher billings of Jurassic World and Minecraft products in connection with their theatrical releases in 2025, and 4% was due to higher billings of Games products, partially offset by lower billings of Building Sets products of 4%.

Sales adjustments increased to $95.2 million in the second quarter of 2025 from $81.2 million in the second quarter of 2024. Sales adjustments as a percentage of net sales increased to 18.7% in the second quarter of 2025, as compared to 17.2% in the second quarter of 2024. The increase in sales adjustments as a percentage of net sales was primarily due to higher promotional activities.

Cost of sales were relatively consistent at $245.0 million in the second quarter of 2025, as compared to $247.9 million in the second quarter of 2024.

Gross margin increased to 51.7% in the second quarter of 2025 from 47.6% in the second quarter of 2024. The increase in gross margin was primarily due to favorable changes in foreign currency exchange rates of 190 basis points, favorable mix and other factors of 150 basis points, incremental realized savings from the OPG program of 110 basis points, and lower inventory management costs of 90 basis points, including lower close-out sales and inventory obsolescence, partially offset by cost inflation of 130 basis points.

International segment operating income was $114.9 million in the second quarter of 2025, as compared to $77.3 million in the second quarter of 2024, primarily due to higher gross profit of $37.3 million.

Results of Operations—First Half

Consolidated Results

The following table presents Mattel's consolidated results for the first half of 2025 and 2024:


	For the Six Months Ended								Year/Year Change
	June 30, 2025				June 30, 2024
	Amount		% of Net Sales		Amount		% of Net Sales		%		Basis Points of Net Sales
	(In millions, except percentage and basis point information)
Net sales	$	1,845.2			$	1,889.2			-2	%
Cost of sales	918.1		49.8	%	969.6		51.3	%	-5	%	(150)
Gross profit	927.0		50.2	%	919.6		48.7	%	1	%	150
Advertising and promotion expenses	149.3		8.1	%	145.2		7.7	%	3	%	40
Other selling and administrative expenses	752.2		40.8	%	726.8		38.5	%	4	%	230
Operating income	25.5		1.4	%	47.7		2.5	%	-46	%	(110)
Interest expense	58.6		3.2	%	60.0		3.2	%	-2	%	—
Interest (income)	(28.3)		-1.5	%	(29.7)		-1.6	%	-5	%	10
Other non-operating expense, net	11.6				11.7
(Loss) income before income taxes	(16.4)		-0.9	%	5.6		0.3	%	N/M		N/M
Benefit from income taxes	(14.4)				(11.6)
(Income) from equity method investments	(15.1)				(11.4)
Net income	$	13.0	0.7	%	$	28.6	1.5	%	-54	%	(80)

N/M - not meaningful

Sales

Net sales in the first half of 2025 were $1.85 billion, a decrease of $44.0 million, or 2%, as compared to $1.89 billion in the first half of 2024. The decrease in net sales was due to a decrease in gross billings of $25.6 million and an increase in sales adjustments of $18.4 million.


	For the Six Months Ended				% Change as Reported		Currency Exchange Rate Impact
	June 30, 2025		June 30, 2024
	(In millions, except percentage information)
Gross Billings by Categories
Dolls	$	631.8	$	708.5	-11	%	-1	%
Infant, Toddler, and Preschool	269.8		325.3		-17	%	-1	%
Vehicles	715.9		667.4		7	%	-1	%
Action Figures, Building Sets, Games, and Other	457.1		399.0		15	%	—	%
Gross Billings	$	2,074.6	$	2,100.3	-1	%	-1	%

Supplemental Gross Billings Disclosure
Gross Billings by Top 3 Power Brands
Barbie	$	374.4	$	443.5	-16	%	-1	%
Hot Wheels	626.1		585.5		7	%	-1	%
Fisher-Price	198.0		229.3		-14	%	-1	%
Other	876.1		841.9		4	%	—	%
Gross Billings	$	2,074.6	$	2,100.3	-1	%	-1	%

Gross billings were $2.07 billion in the first half of 2025, a decrease of $25.6 million, or 1%, as compared to $2.10 billion in the first half of 2024, with an unfavorable impact from changes in currency exchange rates of one percentage point. The decrease in gross billings was primarily due to lower billings of Dolls and Infant, Toddler, and Preschool products, partially offset by higher billings of Action Figures, Building Sets, Games, and Other and Vehicles products.

Dolls gross billings decreased 11%, primarily due to lower billings of Barbie products.

Infant, Toddler, and Preschool gross billings decreased 17%, of which 10% was due to lower billings of Fisher-Price products and 7% was due to lower billings of Baby Gear and Power Wheels products, due to the continued strategic exit from certain product lines in Baby Gear and Power Wheels.

Vehicles gross billings increased 7%, primarily due to higher billings of Hot Wheels products.

Action Figures, Building Sets, Games, and Other gross billings increased 15%, of which 23% was due to higher billings of Action Figures products, primarily due to higher billings of Jurassic World and Minecraft products in connection with their theatrical releases in 2025, partially offset by lower billings of Building Sets products of 8%.

Sales adjustments generally represent arrangements with Mattel's customers to provide sales incentives, support customer promotions, and provide allowances for returns and defective merchandise. Such programs are based primarily on customer purchases, customer performance of specified promotional activities, and other specified factors such as sales to consumers. Additionally, sales adjustments may include foreign currency transaction gains and losses from the remeasurement of accounts receivable denominated in currencies that are different from the relevant entity's functional currency. Sales adjustments increased to $229.4 million in the first half of 2025 from $211.0 million in the first half of 2024. Sales adjustments as a percentage of net sales increased to 12.4% in the first half of 2025, as compared to 11.2% in the first half of 2024. The increase in sales adjustments as a percentage of net sales was primarily due to higher promotional activities.

Cost of Sales

Cost of sales decreased by $51.5 million, or 5%, to $918.1 million in the first half of 2025 from $969.6 million in the first half of 2024. Within cost of sales, product and other costs decreased by $58.0 million, or 8%, to $687.2 million in the first half of 2025 from $745.2 million in the first half of 2024. Freight and logistics expenses decreased by $3.4 million, or 2%, to $137.2 million in the first half of 2025, as compared to $140.6 million in the first half of 2024. Royalty expense increased by $9.9 million, or 12%, to $93.7 million in the first half of 2025 from $83.8 million in the first half of 2024.

Gross Margin

Gross margin increased to 50.2% in the first half of 2025 from 48.7% in the first half of 2024. The increase in gross margin was primarily due to incremental realized savings from the OPG program of 120 basis points, lower inventory management costs of 90 basis points, driven by lower close-out sales and inventory obsolescence, and favorable mix and other factors of 40 basis points, partially offset by cost inflation of 100 basis points.

Advertising and Promotion Expenses

Advertising and promotion expenses primarily consist of: (i) media costs, which include the media, planning, and buying fees for television, print, and online advertisements, (ii) non-media costs, which include commercial and website production, merchandising, and promotional costs, (iii) retail advertising costs, which include consumer direct catalogs; and (iv) general advertising costs, which include trade show costs. Advertising and promotion expenses as a percentage of net sales was relatively consistent at 8.1% in the first half of 2025, as compared to 7.7% in the first half of 2024.

Other Selling and Administrative Expenses

Other selling and administrative expenses were $752.2 million, or 40.8% of net sales, in the first half of 2025, an increase of $25.4 million, as compared to $726.8 million, or 38.5% of net sales, in the first half of 2024. The increase in other selling and administrative expenses was primarily due to higher expenses related to inclined sleeper product recalls of $13.7 million, higher employee compensation of $7.7 million, higher severance and restructuring charges of $6.8 million, and higher outside services and other administrative expenses of $12.4 million, partially offset by realized savings from the OPG program of $20.3 million.

Interest Expense

Interest expense was $58.6 million in the first half of 2025, relatively flat as compared to $60.0 million in the first half of 2024.

Interest Income

Interest income was $28.3 million in the first half of 2025, relatively flat as compared to $29.7 million in the first half of 2024.

Benefit from Income Taxes

Mattel's benefit from income taxes was $14.4 million for the first half of 2025, as compared to $11.6 million for the first half of 2024. The increase in benefit from income taxes was due to higher loss before income taxes, partially offset by lower discrete income tax benefits. During the first half of 2025, Mattel recognized a net discrete income tax benefit of $10.4 million, primarily related to a change of its indefinite reinvestment assertion relating to certain foreign subsidiary earnings. During the first half of 2024, Mattel recognized a net discrete tax benefit of $12.9 million, primarily related to tax elections filed to amortize certain intangible assets transferred as part of Mattel's intra-group intellectual property rights transfer and previously unrecognized tax benefits.

Evaluating the need for and the amount of a valuation allowance for deferred tax assets often requires significant judgment and extensive analysis of all available evidence to determine whether it is more-likely-than-not that these assets will be realizable. Mattel routinely assesses the positive and negative evidence for this realizability, including the evaluation of sustained profitability and three years of cumulative pretax income for each tax jurisdiction. For the first half of 2025 and 2024, there were no material changes to Mattel's valuation allowance.

Segment Results

North America Segment


	For the Six Months Ended				% Change as Reported		Currency Exchange Rate Impact
	June 30, 2025		June 30, 2024
	(In millions, except percentage information)
Net Sales	$	1,002.2	$	1,084.3	-8	%	—	%
Segment Operating Income	176.9		209.9		-16	%

Net sales for the North America segment in the first half of 2025 were $1.00 billion, a decrease of $82.1 million, or 8%, as compared to $1.08 billion in the first half of 2024. The decrease in net sales was primarily due to a decrease in gross billings of $79.8 million.


	For the Six Months Ended				% Change as Reported		Currency Exchange Rate Impact
	June 30, 2025		June 30, 2024
	(In millions, except percentage information)
Gross Billings by Categories
Dolls	$	340.9	$	395.9	-14	%	—	%
Infant, Toddler, and Preschool	150.0		192.1		-22	%	—	%
Vehicles	324.3		317.0		2	%	—	%
Action Figures, Building Sets, Games, and Other	258.2		248.3		4	%	—	%
Gross Billings	$	1,073.5	$	1,153.3	-7	%	—	%

Supplemental Gross Billings Disclosure
Gross Billings by Top 3 Power Brands
Barbie	$	184.2	$	232.4	-21	%	—	%
Hot Wheels	273.1		271.3		1	%	—	%
Fisher-Price	110.4		132.1		-16	%	—	%
Other	505.9		517.5		-2	%	—	%
Gross Billings	$	1,073.5	$	1,153.3	-7	%	—	%

Gross billings for the North America segment were $1.07 billion in the first half of 2025, a decrease of $79.8 million, or 7%, as compared to $1.15 billion in the first half of 2024. The decrease in gross billings was primarily due to lower billings of Dolls and Infant, Toddler, and Preschool products, partially offset by higher billings of Action Figures, Building Sets, Games, and Other and Vehicles products.

Dolls gross billings decreased 14%, primarily due to lower billings of Barbie products.

Infant, Toddler, and Preschool gross billings decreased 22%, of which 11% was due to lower billings of Fisher-Price products and 11% was due to lower billings of Baby Gear and Power Wheels products, due to the continued strategic exit from certain product lines in Baby Gear and Power Wheels.

Vehicles gross billings increased 2%, of which 1% was due to higher billings of Cars (Disney Pixar) products and 1% was due to higher billings of Hot Wheels products.

Action Figures, Building Sets, Games, and Other gross billings increased 4%, of which 18% was due to higher billings of Action Figures products, primarily due to higher billings of Jurassic World and Minecraft products in connection with their theatrical releases in 2025, partially offset by lower billings of Building Sets products of 9% and lower billings of Games products of 3%.

Sales adjustments increased to $71.3 million in the first half of 2025 from $69.0 million in the first half of 2024. Sales adjustments as a percentage of net sales increased to 7.1% for the first half of 2025, as compared to 6.4% for the first half of 2024, primarily due to higher promotional activities and a shift in sales channel mix resulting in a higher proportion of sales with higher average sales adjustment rates.

Cost of sales decreased by $54.9 million, or 10%, to $522.0 million in the first half of 2025 from $576.9 million in the first half of 2024, primarily due to a decrease in product and other costs of $52.7 million.

Gross margin in the first half of 2025 increased to 47.9% from 46.8% in the first half of 2024, primarily due to incremental realized savings from the OPG program of 120 basis points, lower inventory management costs of 80 basis points, including lower close-out sales and inventory obsolescence, partially offset by cost inflation of 80 basis points and unfavorable mix and other factors of 10 basis points.

North America segment operating income decreased by $33.0 million to $176.9 million in the first half of 2025, as compared to $209.9 million in the first half of 2024, primarily due to lower gross profit of $27.2 million and higher advertising and promotion expenses of $6.8 million.

International Segment

The following tables provide a summary of Mattel's net sales, segment operating income, and gross billings by categories, along with supplemental information by brand, for the International segment for the first half of 2025 and 2024:


	For the Six Months Ended				% Change as Reported		Currency Exchange Rate Impact
	June 30, 2025		June 30, 2024
	(In millions, except percentage information)
Net Sales	$	843.0	$	805.0	5	%	-2	%
Segment Operating Income	138.2		86.6		60	%

Net sales for the International segment in the first half of 2025 were $843.0 million, an increase of $38.1 million, or 5%, as compared to $805.0 million in the first half 2024, with an unfavorable impact from changes in currency exchange rates of two percentage points. The increase in net sales was due to an increase in gross billings of $54.1 million, partially offset by an increase in sales adjustments of $16.1 million.


	For the Six Months Ended				% Change as Reported		Currency Exchange Rate Impact
	June 30, 2025		June 30, 2024
	(In millions, except percentage information)
Gross Billings by Categories
Dolls	$	290.8	$	312.7	-7	%	-1	%
Infant, Toddler, and Preschool	119.9		133.2		-10	%	-2	%
Vehicles	391.6		350.4		12	%	-2	%
Action Figures, Building Sets, Games, and Other	198.9		150.6		32	%	-1	%
Gross Billings	$	1,001.1	$	947.0	6	%	-2	%

Supplemental Gross Billings Disclosure
Gross Billings by Top 3 Power Brands
Barbie	$	190.3	$	211.1	-10	%	-1	%
Hot Wheels	353.0		314.2		12	%	-2	%
Fisher-Price	87.6		97.2		-10	%	-3	%
Other	370.2		324.4		14	%	-1	%
Gross Billings	$	1,001.1	$	947.0	6	%	-2	%

Gross billings for the International segment were $1.00 billion in the first half of 2025, an increase of $54.1 million, or 6%, as compared to $947.0 million in the first half of 2024, with an unfavorable impact from changes in currency exchange rates of two percentage points. The increase in gross billings was due to higher billings of Action Figures, Building Sets, Games, and Other and Vehicles products, partially offset by lower billings of Dolls and Infant, Toddler, and Preschool products.

Dolls gross billings decreased 7%, primarily due to lower billings of Barbie products.

Infant, Toddler, and Preschool gross billings decreased 10%, of which 7% was due to lower billings of Fisher-Price products and 3% was due to lower billings of Baby Gear and Power Wheels products, due to the continued strategic exit from certain product lines in Baby Gear and Power Wheels.

Vehicles gross billings increased 12%, primarily due to higher billings of Hot Wheels products.

Action Figures, Building Sets, Games, and Other gross billings increased 32%, of which 33% was due to higher billings of Action Figures products, primarily due to higher billings of Jurassic World and Minecraft products in connection with their theatrical releases in 2025, and 6% was due to higher billings of Games products, partially offset by lower billings of Building Sets products of 6%.

Sales adjustments increased to $158.1 million in the first half of 2025 from $142.0 million in the first half of 2024. Sales adjustments as a percentage of net sales increased to 18.8% for the first half of 2025, as compared to 17.6% for the first half of 2024. The increase in sales adjustments as a percentage of net sales was primarily due to higher promotional activities.

Cost of sales decreased by $11.4 million, or 3%, to $420.6 million in the first half of 2025 from $431.9 million in the first half of 2024, primarily due to a decrease in product and other costs of $20.0 million, partially offset by an increase in royalty expense of $7.0 million.

Gross margin increased to 50.1% in the first half of 2025 from 46.3% in the first half of 2024, primarily due to favorable changes in foreign currency exchange rates of 240 basis points, incremental realized savings from the OPG program of 110 basis points, lower inventory management costs of 100 basis points, including lower close-out sales and inventory obsolescence, and favorable mix and other factors of 60 basis points, partially offset by cost inflation of 130 basis points.

International segment operating income increased by $51.7 million to $138.2 million in the first half of 2025, as compared to $86.6 million in the first half of 2024, primarily due to higher gross profit of $49.4 million.

Cost Savings Program

Optimizing for Profitable Growth

On February 7, 2024, Mattel announced the OPG program, a multi-year cost savings program that follows the Optimizing for Growth program (the "OFG program"), which concluded in the fourth quarter of 2023. The OPG program is designed to achieve further efficiency and cost savings opportunities, primarily within Mattel’s global supply chain, including its manufacturing footprint. The OPG program includes cost savings actions in connection with discontinuing production at a plant in China, as previously announced in the third quarter of 2023, as well as savings from other previous actions taken in 2023 that were not recognized in the OFG program. Targeted annual gross cost savings from actions associated with the OPG program, which are expected to be completed by 2026, are $200 million. Of the $200 million in targeted annual gross costs savings, approximately 60% is expected to benefit cost of sales and 40% is expected to benefit other selling and administrative expenses. Total cash expenditures under the OPG program are expected to be between $115 and $140 million and total non-cash charges are expected to be up to $5 million.

The costs associated with the OPG program are expected to include the following:


Optimizing for Profitable Growth – Actions			Estimate of Cost
Employee severance			$105 to $120 million
Other restructuring costs			$5 to $10 million
Non-cash charges			up to $5 million
Total estimated severance and other restructuring costs			$110 to $135 million
Investments			$5 to $10 million
Total estimated actions			$115 to $145 million

In connection with the OPG program, Mattel recorded severance and other restructuring costs in the following cost and expense categories within operating income in the consolidated statements of operations:


	For the Three Months Ended				For the Six Months Ended
	June 30, 2025		June 30, 2024		June 30, 2025		June 30, 2024
	(In millions)
Cost of sales (a)	$	2.1	$	0.4	$	3.7	$	2.6
Other selling and administrative expenses (b)	1.7		10.5		19.5		18.0
	$	3.8	$	10.9	$	23.2	$	20.6

(a)Severance and other restructuring costs recorded within cost of sales in the consolidated statements of operations are included in segment operating income in "Note 21 to the Consolidated Financial Statements—Segment Information."

(b)Severance and other restructuring costs recorded within other selling and administrative expenses in the consolidated statements of operations are included in corporate and other expense in "Note 21 to the Consolidated Financial Statements—Segment Information."

As of June 30, 2025, Mattel has recorded cumulative severance and other restructuring charges related to the OPG program of approximately $98 million, which includes approximately $3 million of non-cash charges. Mattel realized cumulative cost savings (before severance, restructuring costs, and cost inflation) of approximately $126 million, which represents approximately 60% benefit to cost of sales, and 40% benefit to other selling and administrative expenses, as of June 30, 2025, in connection with the OPG Program.

Liquidity and Capital Resources

Mattel's primary sources of liquidity are its domestic and foreign cash and equivalents balances, driven by cash flows from operating activities, short-term borrowing facilities, including its $1.40 billion Credit Facility, and access to capital markets to fund its operations and obligations. Such obligations may include capital expenditures, debt service, future royalty payments pursuant to licensing agreements, future inventory and service purchases, and required cash contributions and payments related to benefit plans. Of Mattel's $870.5 million in cash and equivalents at June 30, 2025, $635.3 million was held by foreign subsidiaries, including $73.6 million held in Russia. Mattel's cash held in Russia can be used within the country; however, its movement out of Russia is currently limited. In early 2022, Mattel paused all shipments into Russia.

Cash flows from operating activities could be negatively impacted by decreased demand for Mattel's products, which could result from factors such as, but not limited to, adverse economic conditions and changes in public and consumer preferences, or by increased costs associated with manufacturing and distribution of products, such as tariffs, or shortages in raw materials or component parts. Additionally, Mattel's ability to issue long-term debt and obtain seasonal financing could be adversely affected by factors such as, but not limited to, global economic crises and tight credit environments, an inability to comply with its debt covenants and its Credit Facility covenants, or deterioration of Mattel's credit ratings. However, based on Mattel's current business plan and factors known to date, it is expected that existing cash and equivalents, cash flows from operations, availability under the Credit Facility, and access to capital markets will be sufficient to meet working capital, operating expenditure, and other contractual requirements for the next twelve months and in the long-term.

Current Market Conditions

Mattel is exposed to financial market risk resulting from changes in interest and foreign currency exchange rates.

Mattel intends to utilize its existing cash and cash equivalents, cash flow from operations, and borrowings under the Credit Facility to meet its short-term liquidity needs. At June 30, 2025, Mattel had no outstanding borrowings under the Credit Facility and approximately $9 million in outstanding letters of credit under the Credit Facility.

Market conditions could affect certain terms of other debt instruments that Mattel enters into from time to time.

Mattel monitors the third-party depository institutions that hold Mattel's cash and equivalents. Mattel's emphasis is primarily on safety and liquidity of principal, and secondarily on maximizing the yield on those funds. Mattel diversifies its cash and equivalents among counterparties and securities to minimize risks.

Mattel is subject to credit risks relating to the ability of its counterparties in hedging transactions to meet their contractual payment obligations. The risks related to creditworthiness and nonperformance have been considered in the fair value measurements of Mattel's foreign currency forward exchange contracts. Mattel closely monitors its counterparties and takes action, as necessary, to manage its counterparty credit risk.

Mattel expects that some of its customers and vendors may experience difficulty in obtaining the liquidity required to buy inventory or raw materials. Mattel monitors its customers' financial condition and their liquidity in order to mitigate accounts receivable collectability risks, and customer terms and credit limits are adjusted, if necessary. Additionally, Mattel uses a variety of financial arrangements to support the collectability of accounts receivable of customers deemed to be a credit risk, including requiring letters of credit, purchasing various forms of credit insurance with unrelated third parties, or requiring cash in advance of shipment.

Mattel sponsors defined benefit pension plans and postretirement benefit plans for its employees. Actual returns below the expected rate of return, along with changes in interest rates that affect the measurement of the liability, would impact the amount and timing of Mattel's future contributions to these plans.

Cash Flow Activities

Cash flows used for operating activities were $275.3 million in the first half of 2025, as compared to $217.4 million in the first half of 2024. The increase in cash flows used for operating activities was primarily due to a decrease in net income, excluding the impact of non-cash items, and an increase in cash used for working capital of $18.4 million. The increase in cash used for working capital was primarily due to $71.8 million of unfavorable changes in inventory, partially offset by $41.5 million of favorable changes in prepaid expenses.

Cash flows used for investing activities were $54.6 million in the first half of 2025, as compared to $72.7 million in the first half of 2024. The decrease in cash flows used for investing activities was primarily due to an increase in proceeds from Mattel-owned life insurance policies of $8.7 million and an increase in proceeds from foreign currency forward exchange contracts of $8.4 million in the first half of 2025.

Cash flows used for financing activities were $222.4 million in the first half of 2025, as compared to $240.0 million in the first half of 2024. The decrease in cash flows used for financing activities was primarily due to a decrease in cash used for other financing activities of $28.0 million, partially offset by $10.0 million of higher share repurchases in the first half of 2025 as compared to the first half of 2024.

Seasonal Financing

See Part I, Item 1 "Financial Statements—Note 8 to the Consolidated Financial Statements—Seasonal Financing" of this Quarterly Report on Form 10-Q.

Financial Position

Mattel's cash and equivalents decreased $517.5 million to $870.5 million at June 30, 2025 from $1.39 billion at December 31, 2024, primarily due to cash flows used for operating activities of $275.3 million, share repurchases of $210.0 million, and capital expenditures of $76.0 million, partially offset by favorable effects of currency exchange rate changes on cash of $34.8 million. Mattel's cash and equivalents increased $148.0 million to $870.5 million at June 30, 2025 from $722.4 million at June 30, 2024, primarily due to cash flows provided by operating activities of $744.6 million during the trailing twelve months, partially offset by $410.0 million of share repurchases and $213.2 million of capital expenditures during the trailing twelve months.

Accounts receivable decreased $210.7 million to $792.5 million at June 30, 2025 from $1.00 billion at December 31, 2024, primarily due to seasonal declines as year-end receivables were collected. Accounts receivable decreased by $46.9 million to $792.5 million at June 30, 2025 from $839.4 million at June 30, 2024, primarily due to lower sales and timing of collections.

Inventories increased $366.2 million to $867.9 million at June 30, 2025 from $501.7 million at December 31, 2024, primarily due to seasonal inventory build. Inventories increased $91.0 million to $867.9 million at June 30, 2025 from $776.9 million at June 30, 2024, primarily due to tariff related impacts, lower sales in the second quarter of 2025 as compared to the second quarter of 2024, and the impact of foreign currency translation.

Prepaid expenses and other current assets increased $34.1 million to $268.2 million at June 30, 2025 from $234.1 million at December 31, 2024, primarily due to increases in prepaid royalties of $18.3 million, prepaid income taxes of $11.0 million, and prepaid insurance of $8.8 million, partially offset by a decrease in derivative receivables of $16.3 million. Prepaid expenses and other current assets were $268.2 million at June 30, 2025, relatively flat as compared to $265.7 million at June 30, 2024.

Accounts payable and accrued liabilities decreased $154.7 million to $1.12 billion at June 30, 2025 from $1.28 billion at December 31, 2024, due to seasonal declines in expenditure levels. Accounts payable and accrued liabilities increased $117.5 million to $1.12 billion at June 30, 2025 from $1.01 billion at June 30, 2024, primarily due to an increase in accounts payable of $42.4 million and an increase in derivative liabilities of $28.8 million.

A summary of Mattel's capitalization is as follows:


	June 30, 2025				June 30, 2024				December 31, 2024
	(In millions, except percentage information)
Cash and equivalents	$	870.5			$	722.4			$	1,387.9

2010 Senior Notes due October 2040	250.0				250.0				250.0
2011 Senior Notes due November 2041	300.0				300.0				300.0
2019 Senior Notes due December 2027	600.0				600.0				600.0
2021 Senior Notes due April 2026	600.0				600.0				600.0
2021 Senior Notes due April 2029	600.0				600.0				600.0
Debt issuance costs and debt discount	(13.5)				(17.8)				(15.6)
Total debt	2,336.5		52	%	2,332.2		54	%	2,334.4		51	%
Stockholders' equity	2,171.9		48		1,973.1		46		2,264.1		49
Total capitalization (total debt plus stockholders' equity)	$	4,508.4	100	%	$	4,305.3	100	%	$	4,598.5	100	%

Total debt was $2.34 billion at June 30, 2025, and $2.33 billion at both December 31, 2024 and June 30, 2024. Mattel's $600.0 million of 2021 Senior Notes are scheduled to mature in April 2026, which Mattel intends to repay or refinance prior to the scheduled maturity date.

Stockholders' equity decreased $92.3 million to $2.17 billion at June 30, 2025 from $2.26 billion at December 31, 2024, primarily due to share repurchases of $211.9 million, partially offset by other comprehensive income of $77.5 million and the impact of share-based compensation on additional paid-in capital of $38.6 million during the first half of 2025. Stockholders' equity increased $198.7 million to $2.17 billion at June 30, 2025 from $1.97 billion at June 30, 2024, primarily due to net income of $526.3 million and the impact of share-based compensation on additional paid-in capital of $80.3 million during the trailing twelve months, partially offset by share repurchases of $413.7 million.

Litigation

See Part I, Item 1 "Financial Statements—Note 20 to the Consolidated Financial Statements—Contingencies" of this Quarterly Report on Form 10-Q.

Application of Critical Accounting Policies and Estimates

Mattel's critical accounting policies and estimates are included in the 2024 Annual Report on Form 10-K and did not materially change during the first half of 2025.

New Accounting Pronouncements

See Part I, Item 1 "Financial Statements—Note 22 to the Consolidated Financial Statements—New Accounting Pronouncements" of this Quarterly Report on Form 10-Q.

Non-GAAP Financial Measure

To supplement the financial results presented in accordance with GAAP, Mattel presents a non-GAAP financial measure within the meaning of Regulation G promulgated by the SEC. The non-GAAP financial measure that Mattel presents is currency exchange rate impact. Mattel uses this measure to analyze its continuing operations and to monitor, assess, and identify meaningful trends in its operating and financial performance. Mattel believes that the disclosure of this non-GAAP financial measure provides useful supplemental information to investors to be able to better evaluate ongoing business performance and certain components of Mattel's results. This measure is not, and should not be viewed as, a substitute for GAAP financial measures and may not be comparable to similarly-titled measures used by other companies.

Currency Exchange Rate Impact

The currency exchange rate impact reflects the portion (expressed as a percentage) of changes in Mattel's reported results that are attributable to fluctuations in currency exchange rates.

For entities reporting in currencies other than the U.S. dollar, Mattel calculates the percentage change of period-over-period results at constant currency exchange rates (established as described below) by translating current period and prior period results using these rates and then determines the currency exchange rate impact percentage by calculating the difference between the percentage change at such constant currency exchange rates and the percentage change at actual exchange rates.

The constant currency exchange rates are determined by Mattel at the beginning of each year and are applied consistently during the year. They are generally different from the actual exchange rates in effect during the current or prior period due to volatility in actual currency exchange rates. Mattel considers whether any changes to the constant currency rates are appropriate at the beginning of each year. The exchange rates used for these constant currency calculations are generally based on prior year actual exchange rates.

Mattel believes that the disclosure of the percentage impact of currency changes is useful supplemental information for investors to be able to gauge Mattel's current business performance and the longer-term strength of its overall business since currency changes could potentially mask underlying sales trends. The disclosure of the percentage impact of currency exchange allows investors to calculate the impact on a constant currency basis and also enhances their ability to compare financial results from one period to another.

Key Performance Indicator

Gross billings represent amounts invoiced to customers. It does not include the impact of sales adjustments, such as trade discounts and other allowances. Mattel presents changes in gross billings as a metric for comparing its aggregate, categorical, brand, and geographic results to highlight significant trends in Mattel's business. Changes in gross billings are discussed because, while Mattel records the details of sales adjustments in its financial accounting systems at the time of sale, such sales adjustments are generally recorded by customer and not associated with categories, brands, or individual products.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

Foreign Currency Exchange Rate Risk

Currency exchange rate fluctuations may impact Mattel's results of operations and cash flows. The Hong Kong dollar, Euro and Chinese yuan were the primary currencies that caused foreign currency transaction exposure for Mattel during the first half of 2025. Mattel seeks to mitigate its foreign currency exchange risk by monitoring its foreign currency transaction exposure for the year and partially hedging such exposure using foreign currency forward exchange contracts primarily to hedge its purchase and sale of inventory and other intercompany transactions denominated in foreign currencies. These contracts generally have maturity dates of up to 24 months. For those intercompany receivables and payables that are not hedged, the transaction gains or losses are recorded in the consolidated statements of operations in the period in which the exchange rate changes as part of operating income or other non-operating (income) expense, net based on the nature of the underlying transaction. Transaction gains or losses on hedged intercompany inventory transactions are recorded in the consolidated statements of operations in the period in which the inventory is sold to customers. In addition, Mattel manages its exposure to currency exchange rate fluctuations through the selection of currencies used for international borrowings. Mattel does not trade in financial instruments for speculative purposes.

Mattel's financial position is also impacted by currency exchange rate fluctuations on translation of its net investments in subsidiaries with non-U.S. dollar functional currencies. Assets and liabilities of subsidiaries with non-U.S. dollar functional currencies are translated into U.S. dollars at fiscal period-end exchange rates. Income, expense, and cash flow items are translated at weighted-average exchange rates prevailing during the fiscal period. The resulting currency translation adjustments are recorded as a component of accumulated other comprehensive loss within stockholders' equity. Mattel's primary currency translation adjustments for the six months ended June 30, 2025 were related to its net investments in entities having functional currencies denominated in the Russian ruble, British pound sterling, and Mexican peso.

There are numerous factors impacting the amount by which Mattel's financial results are affected by foreign currency translation and transaction gains and losses resulting from changes in currency exchange rates, including, but not limited to, the level of foreign currency forward exchange contracts in place at a given time and the volume of foreign currency-denominated transactions in a given period. However, assuming that such factors were held constant, Mattel estimates that a one percent change in the U.S. dollar would have impacted Mattel's second quarter 2025 net sales by approximately 0.4% and would have less than a $0.01 impact to Mattel's net income per share.

Item 4. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

As of June 30, 2025, Mattel's disclosure controls and procedures were evaluated, with the participation of Mattel's principal executive officer and principal financial officer, to assess whether they are effective in providing reasonable assurance that information required to be disclosed by Mattel in the reports that it files or submits under the Securities Exchange Act of 1934, as amended, is accumulated and communicated to management, including its principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure and to provide reasonable assurance that such information is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms. Based on this evaluation, Ynon Kreiz, Mattel's principal executive officer, and Paul Ruh, Mattel's principal financial officer, concluded that these disclosure controls and procedures are not effective as of June 30, 2025 due to a material weakness in Mattel's internal control over financial reporting, which is more fully described in Management's Report on Internal Control Over Financial Reporting, in Part II, Item 8 "Financial Statements and Supplementary Data" in the 2024 Annual Report on Form 10-K.

Remediation Plan

Management is in the process of executing its remediation plan to address the material weakness. During the quarter ended June 30, 2025, management tested the operating effectiveness of user access provisioning and review controls for certain systems. Additional time is required to further test the operating effectiveness of these controls to demonstrate the effectiveness of the remediation efforts. The material weakness cannot be considered remediated until the applicable remedial controls operate for a sufficient period of time and management has concluded, through testing, that these controls are operating effectively.

Changes in Internal Control Over Financial Reporting

There were no changes in internal control over financial reporting that occurred during the quarter ended June 30, 2025 that have materially affected, or are reasonably likely to materially affect, Mattel's internal control over financial reporting.

PART II—OTHER INFORMATION

Item 1. Legal Proceedings.

The content of Part I, Item 1 "Financial Statements—Note 20 to the Consolidated Financial Statements—Contingencies" of this Quarterly Report on Form 10-Q is hereby incorporated by reference in its entirety in this Item 1.

Item 1A. Risk Factors.

Other than as provided in Mattel's Quarterly Report on Form 10-Q for the three months ended March 31, 2025, there have been no material changes to the risk factors disclosed under Part I, Item 1A "Risk Factors" in the 2024 Annual Report on Form 10-K.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

Recent Sales of Unregistered Equity Securities

During the second quarter of 2025, Mattel did not sell any unregistered equity securities.

Issuer Purchases of Equity Securities

The following table provides certain information with respect to Mattel's purchases of its common stock during the second quarter of 2025:


Period	Total Number of Shares Purchased (a)	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (b) (In millions)
April 1-30	760,459	$	15.71	—	$	440.0
May 1-31	2,613,099	19.26		2,596,000	390.0
June 1-30	7,007	19.72		—	390.0
Total	3,380,565	$	18.46	2,596,000	$	390.0

____________________________________

(a)The total number of shares purchased includes 784,565 shares withheld from employees to satisfy minimum tax withholding obligations that occur upon settlement of equity awards, which were not purchased as part of a publicly announced repurchase plan or program.

(b)On February 5, 2024, the Board of Directors authorized a $1.00 billion share repurchase program. As of June 30, 2025, Mattel had a remaining authorization of $390.0 million under the program. Repurchases under the share repurchase program will take place from time to time, depending on market conditions. Mattel's share repurchase program has no expiration date.

Item 3. Defaults Upon Senior Securities.

None.

Item 4. Mine Safety Disclosures.

Not applicable.

Item 5. Other Information.

(a)None.

(b)Not applicable.

(c).

Item 6. Exhibits.

Incorporated by Reference

Exhibit No.

Exhibit Description

Form

File No.

Exhibit(s)

Filing Date

3.0

Restated Certificate of Incorporation of Mattel, Inc.

8-K

001-05647

99.0

May 21, 2007

3.1

Certificate of Amendment of the Restated Certificate of Incorporation of Mattel, Inc.

8-K

001-05647

3.1

May 30, 2025

3.2

Amended and Restated Bylaws of Mattel, Inc.

8-K

001-05647

3.1

September 15, 2023

4.0

Specimen Stock Certificate with respect to Mattel, Inc.'s Common Stock

10-Q

001-05647

4.0

August 3, 2007

10.1+*

Letter Agreement between Mattel, Inc. and Paul Ruh, dated May 2, 2025

8-K

001-05647

10.1

May 8, 2025

31.0*

Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.1*

Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32.0**

Certifications of Principal Executive Officer and Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

101.INS*

Inline XBRL Instance Document

101.SCH*

Inline XBRL Taxonomy Extension Schema Document

101.CAL*

Inline XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF*

Inline XBRL Taxonomy Extension Definition Linkbase Document

101.LAB*

Inline XBRL Taxonomy Extension Label Linkbase Document

101.PRE*

Inline XBRL Taxonomy Extension Presentation Linkbase Document

104*

The cover page from this Quarterly Report on Form 10-Q, formatted in Inline XBRL.

______________________________________________


+			Management contract or compensatory plan or arrangement.
*			Filed herewith.
**			Furnished herewith. This exhibit should not be deemed to be "filed" for purposes of Section 18 of the Securities Exchange Act of 1934.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


			MATTEL, INC. Registrant

			By:						/s/ Yoon Hugh
									Yoon Hugh Senior Vice President and Corporate Controller (Duly Authorized Officer and Chief Accounting Officer)

Date: July 29, 2025