Mattel Reports 6% Decrease in Net Sales to $1.02 Billion in Q2 2025

Mattel Inc. reported a decrease in net sales for the second quarter of 2025, totaling $1.02 billion, down 6% from $1.08 billion in the same period last year. The decline was attributed to a reduction in gross billings, which fell by $50.9 million, alongside an increase in sales adjustments of $10.3 million. The company's gross profit for the quarter was $519 million, reflecting a gross margin of 50.9%, an increase from 49.2% in the prior year, primarily due to cost savings from its ongoing Optimizing for Profitable Growth (OPG) program and improved supply chain efficiencies.

In terms of profitability, Mattel's net income for the second quarter was $53.4 million, or $0.16 per share, compared to $56.9 million, or $0.17 per share, in the previous year. The company experienced a significant drop in operating income, which fell to $78.5 million from $83.3 million year-over-year. The decrease in profitability was influenced by a combination of lower sales and increased advertising expenses, which rose by 7% to $79.1 million.

Operationally, Mattel's North America segment saw a 16% decline in net sales, amounting to $510.8 million, while the International segment reported a 7% increase, reaching $507.8 million. The company noted that the U.S. market faced challenges due to global trade dynamics and shifts in retailer ordering patterns, particularly amid tariff uncertainties. In contrast, the International segment benefited from strong demand for vehicles and action figures, with gross billings in these categories increasing by 15% and 45%, respectively.

Mattel's inventory levels rose to $867.9 million, up from $501.7 million at the end of 2024, reflecting a seasonal build-up and strategic adjustments in response to tariff impacts and lower sales. The company ended the quarter with a cash balance of $870.5 million, an increase from $722.4 million a year earlier, despite significant share repurchases totaling $410 million over the past twelve months. Looking ahead, Mattel remains cautious about the macroeconomic environment, which could affect consumer demand, and is actively monitoring ongoing trade policy developments that may impact its operations.