Mattel Reports $61M Net Income in Q1 2026, Acquires Full Stake in Mattel163

Mattel Inc. reported a net income of $61.0 million for the first quarter of 2026, a significant turnaround from a net loss of $40.3 million in the same period last year. The company's net sales increased by 4% to $862.2 million, up from $826.6 million in the first quarter of 2025. This growth was attributed to a rise in gross billings, which reached $971.9 million, reflecting a 5% increase compared to the previous year. However, the gross profit margin declined to 44.9% from 49.4%, primarily due to increased costs associated with tariffs, unfavorable foreign exchange rates, and inflationary pressures.

In terms of operational changes, Mattel completed the acquisition of the remaining 50% equity interest in Mattel163 Limited, a mobile games studio, for $178.6 million on March 2, 2026. This acquisition is expected to enhance Mattel's digital games business and contribute to its overall growth strategy. The company recognized a gain of $147.9 million from the remeasurement of its previously held equity interest in Mattel163, which positively impacted its non-operating income for the quarter.

Geographically, Mattel's North America segment experienced a decline in net sales, dropping to $475.1 million, a decrease of 3% from the previous year. In contrast, the International segment saw a 15% increase in net sales, reaching $387.0 million, driven by strong performance in the Vehicles and Action Figures categories. The company reported a total of $1.19 billion in accounts payable and accrued liabilities as of March 31, 2026, reflecting a decrease from the previous quarter, primarily due to seasonal factors.

Looking ahead, Mattel is focused on optimizing its operations through its "Optimizing for Profitable Growth" program, which aims to achieve $225 million in annual gross cost savings by the end of 2026. The company is also navigating a complex macroeconomic environment, with ongoing uncertainties related to global trade policies and consumer demand. Despite these challenges, Mattel anticipates that its existing cash reserves, cash flows from operations, and access to credit facilities will be sufficient to meet its operational needs in the coming year.