Mattel Q3 2026 net income rises to $354M
An approximately $88 million IEEPA refund contributed to third-quarter gross-margin and operating-income increases, while nine-month operating income was lower year over year.
Sentiment and the balance of points
Rhea-AI Sentiment reads the wording of the document, how positive or negative its language is on a 1 to 5 scale. The balance of points shown with the takes weighs what the document actually discloses, so the two can disagree, for example when a trial that missed its main goal is described in upbeat language.
Form Type
10-Q
Mattel, Inc. reported third-quarter 2026 net sales of $1.807 billion, up 4% from $1.736 billion a year earlier, and net income of $353.6 million versus $278.4 million. Gross margin was 54.8%, compared with 50.0%, and operating income was $476.3 million versus $379.8 million; the increase benefited from approximately $88 million of IEEPA tariff refunds received and recognized during the quarter.
For the nine months ended September 30, 2026, net sales were $3.794 billion versus $3.581 billion and net income was $396.4 million versus $291.4 million, including a $147.9 million gain from remeasuring Mattel's previously held Mattel163 interest. Operating income was $384.5 million versus $405.4 million, while net cash used in operating activities was $113.5 million versus $203.3 million. Mattel acquired the remaining 50% of mobile games studio Mattel163 on March 2, 2026, for a $178.6 million purchase price, making it wholly owned.
Roger Lynch became Chairman of the Board on October 2, 2026, and Chief Executive Officer on October 12, 2026. Peter Griffith became Chief Financial Officer and a Board member on October 20, 2026. On October 21, 2026, Mattel entered a cooperation agreement with EdgePoint Investment Group Inc. and appointed its Partner Lee Matheson to the Board.
1 point · 0 major0 major · 1 point
How this balance works
Rhea-AI gives every point it takes from this document a weight. Minor counts 1, Moderate 3 and Major 9, so one Major point outweighs several Minor ones. The bar adds up the weights on each side, and when neither side holds more than 65% of the total the balance reads Mixed.
It reads the document as published, with the same rules for every company, and it does not look at what the market expected or at how the stock traded, so a point can be objectively good on a day the stock falls.
Rhea-AI Sentiment measures something else, the tone of the wording.
Positive
- Moderate pointThird-quarter net income was $353.6 million, versus $278.4 million a year earlier.
Negative
- Moderate pointNine-month operating income declined to $384.5 million from $405.4 million.
Filing Explained
By September 30, cash had fallen from $1,242,927 thousand at year-end, while the $1.40 billion revolving line was still undrawn.
This Form 10-Q reports Mattel's interim financial position as of
Mattel reported
Key Figures
Net sales: $1.807 billion vs. $1.736 billion
Gross margin: 54.8% vs. 50.0%
Operating income: $476.3 million vs. $379.8 million
+5 more
8 metrics
Net sales
$1.807 billion vs. $1.736 billion
Three months ended September 30, 2026; comparative 2025 period
Gross margin
54.8% vs. 50.0%
Third quarter 2026 vs. third quarter 2025
Operating income
$476.3 million vs. $379.8 million
Third quarter 2026 vs. third quarter 2025
Net income
$353.6 million vs. $278.4 million
Third quarter 2026 vs. third quarter 2025
Nine-month net income
$396.4 million vs. $291.4 million
Nine months ended September 30, 2026 and 2025
Nine-month operating income
$384.5 million vs. $405.4 million
Nine months ended September 30, 2026 and 2025
IEEPA tariff refunds
Approximately $88 million
Received and recognized during the third quarter of 2026
Net cash used in operating activities
$113.5 million vs. $203.3 million
Nine months ended September 30, 2026 and 2025
Key Terms
gross billings, cash flow hedges, Level 3, total leverage ratio, +1 more
5 terms
gross billings financial
"gross billings represent amounts invoiced to customers"
Gross Billings is the total amount of money a company earns from selling its products or services before any expenses or discounts are taken out. It shows how much business the company is doing overall and helps investors understand its growth or size. Think of it as the total sales receipt before deducting costs or returns.
cash flow hedges financial
"These contracts are designated as cash flow hedges"
A cash flow hedge is an accounting label companies use when they enter financial contracts—like currency or interest-rate agreements—to protect expected future cash payments or receipts from unpredictable moves. For investors, it signals that the company is trying to smooth out future cash variability (think of locking in a price to avoid surprises), which can reduce reported profit swings but also means the company has exposure to derivative instruments and their associated risks.
Level 3 financial
"incorporates significant unobservable inputs (Level 3)"
Level 3 describes the lowest-confidence category in the accounting “fair value” hierarchy, covering assets or liabilities whose prices are not observable in the market and must be estimated using judgment and internal models. For investors, Level 3 items matter because they can introduce greater uncertainty and potential valuation swings—like valuing a unique antique versus checking a price tag on a supermarket shelf—so they signal higher model risk and lower liquidity.
total leverage ratio financial
"a total leverage ratio as of the end of each fiscal quarter"
measurement period financial
"during the measurement period, which may extend up to one year"
FAQ
AI-generated questions and answers. How Rhea-AI works. Not financial advice.
What were MAT's third-quarter 2026 sales and net income?
MAT reported net sales of $1.807 billion and net income of $353.6 million for the three months ended September 30, 2026. The comparable 2025 amounts were $1.736 billion and $278.4 million, respectively. Gross margin was 54.8%, compared with 50.0%.
What cash costs does MAT expect from its restructuring program?
Mattel expected total cash expenditures of up to approximately $140 million for its Optimizing for Profitable Growth program. As of September 30, 2026, it had recorded approximately $136 million in cumulative charges; total non-cash charges were expected to be approximately $5 million.
AI-generated analysis. How Rhea-AI works. Not financial advice.
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
___________________________________________________________
FORM 10-Q
___________________________________________________________
(Mark One)
| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |||||
For the quarterly period ended | ||||||||
or
| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |||||
For the transition period from to | |||||
Commission File Number 001-05647
___________________________________________________________
MATTEL, INC.
(Exact name of registrant as specified in its charter)
___________________________________________________________
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |||||||
| (Address of principal executive offices) | (Zip Code) | ||||||||||
(310 ) 252-2000
(Registrant's telephone number, including area code)
NONE
(Former name, former address and former fiscal year, if changed since last report)
__________________________________________________________
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||||||||
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.
| ☒ | Accelerated filer | ☐ | ||||||||||||||||||
| Non-accelerated filer | ☐ | Smaller reporting company | ||||||||||||||||||
Emerging growth company | ||||||||||||||||||||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
Number of shares outstanding of registrant's common stock, $1.00 par value, as of October 26, 2026: 285.5 million shares.
1
MATTEL, INC. AND SUBSIDIARIES
| Page | ||||||||
| PART I — FINANCIAL INFORMATION | ||||||||
Item 1. | Financial Statements | 4 | ||||||
Consolidated Balance Sheets | 4 | |||||||
Consolidated Statements of Operations | 5 | |||||||
Consolidated Statements of Comprehensive Income (Loss) | 6 | |||||||
Consolidated Statements of Cash Flows | 7 | |||||||
Consolidated Statements of Stockholders' Equity | 8 | |||||||
Notes to Consolidated Financial Statements | 9 | |||||||
Item 2. | Management's Discussion and Analysis of Financial Condition and Results of Operations | 33 | ||||||
Item 3. | Quantitative and Qualitative Disclosures About Market Risk | 50 | ||||||
Item 4. | Controls and Procedures | 51 | ||||||
| PART II — OTHER INFORMATION | ||||||||
Item 1. | Legal Proceedings | 52 | ||||||
Item 1A. | Risk Factors | 52 | ||||||
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | 52 | ||||||
Item 3. | Defaults Upon Senior Securities | 52 | ||||||
Item 4. | Mine Safety Disclosures | 52 | ||||||
Item 5. | Other Information | 52 | ||||||
Item 6. | Exhibits | 53 | ||||||
Signature | 54 | |||||||
2
Forward-Looking Statements
This Quarterly Report on Form 10-Q contains a number of forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts or by their nature are uncertain and include statements regarding Mattel's plans for future periods and other future events. The use of words such as "anticipates," "expects," "intends," "plans," "projects," "looks forward," "confident that," "believes," and "targeted," among others, generally identify forward-looking statements. These forward-looking statements are based on currently available operating, financial, economic, and other information and assumptions, and are subject to a number of significant risks and uncertainties. A variety of factors or combination of factors, many of which are beyond Mattel's control, may cause actual results or outcomes, or the timing of those results or outcomes, to differ materially from those contained in any forward-looking statements. Specific factors that might cause such a difference include, but are not limited to: (i) Mattel's ability to design, develop, produce, manufacture, source, ship, and distribute products in a timely and cost-effective manner; (ii) sufficient interest in and demand for the products and entertainment Mattel offers by retail customers and consumers to profitably recover Mattel's costs; (iii) downturns in economic conditions affecting Mattel's markets which can negatively impact retail customers and consumers, and which can result in lower employment levels and lower consumer disposable income and spending, including lower spending on purchases of Mattel's products; (iv) other factors which can lower discretionary consumer spending, such as higher costs for fuel and food, drops in the value of homes or other consumer assets, and high levels of consumer debt; (v) potential difficulties or delays Mattel may experience in implementing cost savings and efficiency enhancing initiatives; (vi) other economic and public health conditions or regulatory changes in the markets in which Mattel and its customers and suppliers operate, which could create delays or increase Mattel's costs, such as higher commodity prices, labor costs, transportation costs, or outbreaks of disease; (vii) the effect of inflation on Mattel's business, including cost inflation in supply chain inputs and increased labor costs, as well as pricing actions taken in an effort to mitigate the effects of inflation; (viii) currency fluctuations, including movements in foreign exchange rates, which can lower Mattel's net revenues and earnings, and significantly impact Mattel's costs; (ix) the concentration of Mattel's customers, potentially increasing the negative impact to Mattel of difficulties experienced by any of Mattel's customers, such as bankruptcies or liquidations or a general lack of success, or changes in their purchasing or selling patterns; (x) the inventory policies of Mattel's retail customers, as well as the concentration of Mattel's revenues in the second half of the year, which, coupled with reliance by retailers on quick response inventory management techniques, increases the risk of underproduction, overproduction, and shipping delays; (xi) legal, reputational, and financial risks related to security breaches or cyberattacks; (xii) work disruptions, including as a result of supply chain disruption such as plant or port closures, which may impact Mattel's ability to manufacture or deliver product in a timely and cost-effective manner; (xiii) the impact of competition on revenues, margins, and other aspects of Mattel's business, including the ability to offer products that consumers choose to buy instead of competitive products; (xiv) the ability to secure, maintain, and renew popular licenses from licensors of entertainment properties; (xv) the ability to successfully develop, publish, and commercialize digital games; (xvi) the ability to attract and retain talented employees and adapt to evolving workplace models; (xvii) the risk of product recalls or product liability suits and costs associated with product safety regulations; (xviii) tariffs, tariff-related developments, including refunds, trade restrictions, or trade barriers, which, depending on the effective date and duration of such measures, changes in the amount, scope, and nature of such measures in the future, any countermeasures that the target countries may take, and any mitigating actions that may become available, could increase Mattel's product costs and other costs of doing business, and other changes in laws or regulations in the United States and/or in other major markets, such as China, in which Mattel operates, including, without limitation, with respect to taxes, trade policies, product safety, or sustainability, which may also increase Mattel's product costs and other costs of doing business, and, in each case, reduce Mattel's earnings and liquidity; (xix) business disruptions or other unforeseen impacts due to economic instability, political instability, civil unrest, armed hostilities, such as the conflict in the Middle East, terrorist activities, natural and man-made disasters, pandemics or other public health crises, or other catastrophic events; (xx) failure to realize the planned benefits from any investments or acquisitions made by Mattel, including Mattel163; (xxi) the impact of other market conditions or third-party actions or approvals, including those that result in any significant failure, inadequacy, or interruption from vendors or outsourcers, which could reduce demand for Mattel's products, delay or increase the cost of implementation of Mattel's programs, or alter Mattel's actions and reduce actual results; (xxii) changes in financing markets or the inability of Mattel to obtain financing on attractive terms; (xxiii) the impact of litigation, arbitration, or regulatory decisions or settlement actions; (xxiv) Mattel's ability to navigate regulatory frameworks in connection with new areas of investment, product development, or other business activities, such as artificial intelligence; (xxv) the potential impact of the development, use, and integration of artificial intelligence and machine learning technologies in Mattel's business and products; (xxvi) the sufficiency of additional controls and procedures that Mattel has implemented to remediate the prior material weakness in Mattel's internal control over financial reporting, additional material weaknesses or other deficiencies in the future, or the failure to maintain an effective system of internal control; and (xxvii) other risks and uncertainties detailed in Part I, Item 1A "Risk Factors" in Mattel's Annual Report on Form 10-K for the fiscal year ended December 31, 2025 (the "2025 Annual Report on Form 10-K"), and subsequent periodic filings. Mattel does not update forward-looking statements and expressly disclaims any obligation to do so, except as required by law.
3
PART I—FINANCIAL INFORMATION
Item 1. Financial Statements.
MATTEL, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
| September 30, 2026 | September 30, 2025 | December 31, 2025 | |||||||||||||||
| (Unaudited; in thousands, except share data) | |||||||||||||||||
| ASSETS | |||||||||||||||||
| Current Assets | |||||||||||||||||
| Cash and equivalents | $ | $ | $ | ||||||||||||||
Accounts receivable, net of allowances for credit losses of $ | |||||||||||||||||
| Inventories | |||||||||||||||||
| Prepaid expenses and other current assets | |||||||||||||||||
| Total current assets | |||||||||||||||||
| Noncurrent Assets | |||||||||||||||||
| Property, plant, and equipment, net | |||||||||||||||||
| Right-of-use assets, net | |||||||||||||||||
| Goodwill | |||||||||||||||||
| Deferred income tax assets | |||||||||||||||||
| Identifiable intangible assets, net | |||||||||||||||||
| Other noncurrent assets | |||||||||||||||||
| Total Assets | $ | $ | $ | ||||||||||||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||||||||||||
| Current Liabilities | |||||||||||||||||
| Current portion of long-term debt | $ | $ | $ | ||||||||||||||
| Accounts payable | |||||||||||||||||
| Accrued liabilities | |||||||||||||||||
| Income taxes payable | |||||||||||||||||
| Total current liabilities | |||||||||||||||||
| Noncurrent Liabilities | |||||||||||||||||
| Long-term debt | |||||||||||||||||
| Noncurrent lease liabilities | |||||||||||||||||
| Other noncurrent liabilities | |||||||||||||||||
| Total noncurrent liabilities | |||||||||||||||||
| Stockholders' Equity | |||||||||||||||||
Common stock $ | |||||||||||||||||
| Additional paid-in capital | |||||||||||||||||
Treasury stock at cost: | ( | ( | ( | ||||||||||||||
| Retained earnings | |||||||||||||||||
| Accumulated other comprehensive loss | ( | ( | ( | ||||||||||||||
| Total stockholders' equity | |||||||||||||||||
| Total Liabilities and Stockholders' Equity | $ | $ | $ | ||||||||||||||
The accompanying notes are an integral part of these consolidated financial statements.
4
MATTEL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
| For the Three Months Ended | For the Nine Months Ended | |||||||||||||||||||||||||
| September 30, 2026 | September 30, 2025 | September 30, 2026 | September 30, 2025 | |||||||||||||||||||||||
| (Unaudited; in thousands, except per share amounts) | ||||||||||||||||||||||||||
| Net Sales | $ | $ | $ | $ | ||||||||||||||||||||||
| Cost of sales | ||||||||||||||||||||||||||
| Gross Profit | ||||||||||||||||||||||||||
| Advertising and promotion expenses | ||||||||||||||||||||||||||
| Other selling and administrative expenses | ||||||||||||||||||||||||||
| Operating Income | ||||||||||||||||||||||||||
| Interest expense | ||||||||||||||||||||||||||
| Interest (income) | ( | ( | ( | ( | ||||||||||||||||||||||
| Other non-operating expense (income), net | ( | |||||||||||||||||||||||||
| Income Before Income Taxes | ||||||||||||||||||||||||||
| Provision for income taxes | ||||||||||||||||||||||||||
| Income from equity method investments | ( | ( | ( | |||||||||||||||||||||||
| Net Income | $ | $ | $ | $ | ||||||||||||||||||||||
| Net Income Per Common Share - Basic | $ | $ | $ | $ | ||||||||||||||||||||||
| Weighted-average number of common shares | ||||||||||||||||||||||||||
| Net Income Per Common Share - Diluted | $ | $ | $ | $ | ||||||||||||||||||||||
| Weighted-average number of common and potential common shares | ||||||||||||||||||||||||||
The accompanying notes are an integral part of these consolidated financial statements.
5
MATTEL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
| For the Three Months Ended | For the Nine Months Ended | ||||||||||||||||||||||
| September 30, 2026 | September 30, 2025 | September 30, 2026 | September 30, 2025 | ||||||||||||||||||||
| (Unaudited; in thousands) | |||||||||||||||||||||||
| Net Income | $ | $ | $ | $ | |||||||||||||||||||
| Other Comprehensive (Loss) Income Net of Tax | |||||||||||||||||||||||
| Currency translation adjustments | ( | ( | ( | ||||||||||||||||||||
| Employee benefit plan adjustments | |||||||||||||||||||||||
| Net unrealized gains (losses) on derivative instruments: | |||||||||||||||||||||||
| Unrealized holding gains (losses) | ( | ||||||||||||||||||||||
| Reclassification adjustments included in net income | ( | ||||||||||||||||||||||
| ( | |||||||||||||||||||||||
| Other Comprehensive (Loss) Income Net of Tax | ( | ( | |||||||||||||||||||||
| Comprehensive Income | $ | $ | $ | $ | |||||||||||||||||||
The accompanying notes are an integral part of these consolidated financial statements.
6
MATTEL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
| For the Nine Months Ended | |||||||||||
| September 30, 2026 | September 30, 2025 | ||||||||||
| (Unaudited; in thousands) | |||||||||||
| Cash Flows From Operating Activities: | |||||||||||
| Net income | $ | $ | |||||||||
| Adjustments to reconcile net income to net cash flows used for operating activities: | |||||||||||
| Depreciation | |||||||||||
| Amortization of intangible assets | |||||||||||
| Share-based compensation | |||||||||||
| Inventory obsolescence | |||||||||||
| Deferred income taxes | ( | ( | |||||||||
| Income from equity method investments | ( | ( | |||||||||
| Content assets amortization | |||||||||||
| (Gain) on remeasurement of previously held equity interest | ( | ||||||||||
| Changes in assets and liabilities: | |||||||||||
| Accounts receivable, net | ( | ( | |||||||||
| Inventories | ( | ( | |||||||||
| Prepaid expenses and other current assets | ( | ||||||||||
| Accounts payable, accrued liabilities, and income taxes payable | |||||||||||
| Content assets spend | ( | ( | |||||||||
| Other, net | ( | ||||||||||
| Net cash flows used for operating activities | ( | ( | |||||||||
| Cash Flows From Investing Activities: | |||||||||||
| Purchases of tools, dies, and molds | ( | ( | |||||||||
| Purchases of other property, plant, and equipment | ( | ( | |||||||||
| Payments for acquisitions, net of cash acquired | ( | ||||||||||
| Other, net | |||||||||||
| Net cash flows used for investing activities | ( | ( | |||||||||
| Cash Flows From Financing Activities: | |||||||||||
| Share repurchases | ( | ( | |||||||||
| Tax withholdings for share-based compensation | ( | ( | |||||||||
| Proceeds from stock option exercises | |||||||||||
| Other, net | ( | ( | |||||||||
| Net cash flows used for financing activities | ( | ( | |||||||||
| Effect of Currency Exchange Rate Changes on Cash and Equivalents | ( | ||||||||||
| Change in Cash and Equivalents | ( | ( | |||||||||
| Cash and Equivalents at Beginning of Period | |||||||||||
| Cash and Equivalents at End of Period | $ | $ | |||||||||
The accompanying notes are an integral part of these consolidated financial statements.
7
MATTEL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
| Common Stock | Additional Paid-In Capital | Treasury Stock | Retained Earnings | Accumulated Other Comprehensive Loss | Total Stockholders' Equity | ||||||||||||||||||||||||||||||
| (Unaudited; in thousands) | |||||||||||||||||||||||||||||||||||
| Balance, December 31, 2025 | $ | $ | $ | ( | $ | $ | ( | $ | |||||||||||||||||||||||||||
| Net income | — | — | — | — | |||||||||||||||||||||||||||||||
| Other comprehensive income, 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, March 31, 2026 | $ | $ | $ | ( | $ | $ | ( | $ | |||||||||||||||||||||||||||
| Net loss | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||
| Other comprehensive income, 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, 2026 | $ | $ | $ | ( | $ | $ | ( | $ | |||||||||||||||||||||||||||
| 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, September 30, 2026 | $ | $ | $ | ( | $ | $ | ( | $ | |||||||||||||||||||||||||||
| Common Stock | Additional Paid-In Capital | Treasury Stock | Retained Earnings | Accumulated Other Comprehensive Loss | Total Stockholders' Equity | ||||||||||||||||||||||||||||||
| (Unaudited; in thousands) | |||||||||||||||||||||||||||||||||||
| Balance, December 31, 2024 | $ | $ | $ | ( | $ | $ | ( | $ | |||||||||||||||||||||||||||
| Net loss | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||
| Other comprehensive income, 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, March 31, 2025 | $ | $ | $ | ( | $ | $ | ( | $ | |||||||||||||||||||||||||||
| Net income | — | — | — | — | |||||||||||||||||||||||||||||||
| Other comprehensive income, 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, 2025 | $ | $ | $ | ( | $ | $ | ( | $ | |||||||||||||||||||||||||||
| 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, September 30, 2025 | $ | $ | $ | ( | $ | $ | ( | $ | |||||||||||||||||||||||||||
The accompanying notes are an integral part of these consolidated financial statements.
8
MATTEL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. Basis of Presentation
The accompanying unaudited consolidated financial statements and related disclosures have been prepared in accordance with accounting principles generally accepted in the United States ("GAAP") applicable to interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. In the opinion of management, all adjustments, consisting of only those of a normal recurring nature, considered necessary for a fair statement of the financial position and interim results of Mattel, Inc. and its subsidiaries ("Mattel") as of and for the periods presented have been included.
The December 31, 2025 balance sheet data was derived from audited financial statements; however, the accompanying interim notes to the consolidated financial statements do not include all of the annual disclosures required by GAAP. As Mattel's business is seasonal, results for interim periods are not necessarily indicative of those that may be expected for a full year. The financial information included herein should be read in conjunction with Mattel's consolidated financial statements and related notes in the 2025 Annual Report on Form 10-K.
Certain prior period amounts have been reclassified to conform to the current period presentation.
2. Business Combination
On March 2, 2026 (the "Acquisition Date"), Mattel acquired the remaining 50 % equity interest in Mattel163 Limited ("Mattel163"), a mobile games studio, from its previous joint venture partner, NetEase Hong Kong Digital Interactive Limited. As a result of the transaction, Mattel163 became a wholly owned subsidiary of Mattel, and its financial results subsequent to the Acquisition Date are included in Mattel's consolidated financial statements.
The acquisition of Mattel163 is expected to advance Mattel's digital games business and is expected to add development, publishing, and digital customer acquisition expertise. Mattel expects to leverage Mattel163's capabilities to increase its mobile games output and enhance alignment with the broader Mattel product roadmap.
The estimated enterprise fair value at the Acquisition Date was $357.2 million. The purchase price for the remaining 50 % equity interest was $178.6 million, including working capital and other adjustments, and was subject to customary post-closing adjustments. The purchase price is comprised of cash consideration, a portion of which is a holdback payable following the Acquisition Date.
The transaction was accounted for as a business combination under the acquisition method of accounting in accordance with Accounting Standards Codification 805, Business Combinations. Since Mattel held a 50 % equity interest in Mattel163 immediately prior to the Acquisition Date and accounted for that investment under the equity method, Mattel remeasured its previously held equity interest to its estimated fair value of $178.6 million as of the Acquisition Date and recognized a gain of $147.9 million in other non-operating income, net in the consolidated statement of operations for the three months ended March 31, 2026. Accordingly, the gain is included in the consolidated statement of operations for the nine months ended September 30, 2026.
The fair value of Mattel's previously held equity interest was estimated using an income approach and incorporates significant unobservable inputs (Level 3), including projected future cash flows, long-term revenue growth rates, royalty rates, and discount rates.
9
Mattel allocated the total acquisition-date fair value to the identifiable assets acquired and liabilities assumed based on their estimated fair values as of the Acquisition Date. The following table summarizes the preliminary allocation of the total acquisition-date fair value:
| (In thousands) | |||||
| Cash and equivalents | $ | ||||
| Accounts receivable, net of allowances for credit losses | |||||
| Other tangible assets | |||||
| Identifiable intangible assets, net | |||||
| Accounts payable and other current liabilities | ( | ||||
| Deferred income | ( | ||||
| Other noncurrent liabilities | ( | ||||
| Total identifiable net assets | |||||
| Goodwill | |||||
Identifiable intangible assets consist of developed technology of $126.7 million with an estimated weighted-average useful life of 8.6 years, customer relationships of $27.9 million with an estimated weighted-average useful life of 2.8 years, and internally developed software of $6.6 million with an estimated useful life of 5.0 years, for a total of $161.2 million with an estimated weighted-average useful life of 8.1 years. The fair value of developed technology and customer relationships was determined using an income approach, and the fair value of internally developed software was determined using a cost approach. Each valuation methodology incorporates significant unobservable inputs (Level 3), including projected future cash flows, long-term revenue growth rates, projected technology obsolescence, royalty rates, and discount rates.
The excess of the total acquisition-date fair value over the preliminary fair value of the net identifiable assets acquired was recorded as goodwill. The goodwill recognized was primarily attributable to the assembled workforce and strategic benefits that are expected to be achieved. Approximately $39 million of the goodwill is expected to be deductible for income tax purposes.
The fair values assigned to assets acquired and liabilities assumed are preliminary and subject to change as additional information becomes available during the measurement period, which may extend up to one year from the Acquisition Date. Mattel is continuing to finalize the valuation of certain assets and liabilities, and adjustments to the preliminary values recorded may result in additional adjustments to goodwill.
During the three months ended September 30, 2026, Mattel recognized approximately $3 million and less than $1 million of acquisition-related expenses, including professional fees and integration expenses, within other selling and administrative expenses and cost of sales, respectively. During the nine months ended September 30, 2026, Mattel recognized approximately $9 million and $1 million of acquisition-related expenses, including professional fees and integration expenses, within other selling and administrative expenses and cost of sales, respectively. In addition, during the first quarter of 2026, Mattel recognized approximately $7 million of expense related to the settlement of a pre-existing relationship between Mattel and Mattel163, which was accounted for separately from the business combination and recorded within other selling and administrative expenses.
Pro forma and actual results of operations for this acquisition have not been presented because they are not material.
3. Accounts Receivable, Net
Mattel estimates current expected credit losses based on collection history and management's assessment of the current economic trends, business environment, customers' financial condition, accounts receivable aging, and customer disputes that may impact the level of future credit losses. Accounts receivable were net of allowances for credit losses of $19.6 million, $8.4 million, and $17.4 million as of September 30, 2026, September 30, 2025, and December 31, 2025, respectively.
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4. Inventories
Inventories included the following:
| September 30, 2026 | September 30, 2025 | December 31, 2025 | |||||||||||||||
| (In thousands) | |||||||||||||||||
| Raw materials and work in process | $ | $ | $ | ||||||||||||||
| Finished goods | |||||||||||||||||
| $ | $ | $ | |||||||||||||||
5. Property, Plant, and Equipment, Net
Property, plant, and equipment, net included the following:
| September 30, 2026 | September 30, 2025 | December 31, 2025 | |||||||||||||||
| (In thousands) | |||||||||||||||||
| Land | $ | $ | $ | ||||||||||||||
| Buildings | |||||||||||||||||
| Machinery and equipment | |||||||||||||||||
| Software | |||||||||||||||||
| Tools, dies, and molds | |||||||||||||||||
| Leasehold improvements | |||||||||||||||||
| Construction in progress | |||||||||||||||||
| Less: accumulated depreciation | ( | ( | ( | ||||||||||||||
| $ | $ | $ | |||||||||||||||
Purchases of property, plant, and equipment within the consolidated statements of cash flows were adjusted for unpaid balances of $52.5 million, $25.9 million, and $50.2 million as of September 30, 2026, September 30, 2025, and December 31, 2025, respectively.
6. Goodwill and Identifiable Intangible Assets, Net
Goodwill
Mattel's reporting units are: (i) North America, which consists of the United States and Canada, (ii) International, and (iii) American Girl. Goodwill related to the American Girl reporting unit is included in the North America operating segment. Mattel's reportable segments are: (i) North America and (ii) International. Certain components of the operating segments have been aggregated into a single reporting unit as the components have similar economic characteristics. The similar economic characteristics include the nature of the products, the nature of the production processes, the customers, and the manner in which the products are distributed. Mattel tests its goodwill for impairment annually in the third quarter and whenever events or changes in circumstances indicate that the carrying amount of a reporting unit may exceed its fair value.
Mattel performed a quantitative goodwill impairment assessment as of August 1, 2026, and determined that goodwill was not impaired. The quantitative goodwill impairment assessment includes the use of certain assumptions and estimates to calculate the estimated fair value of Mattel's reporting units. To the extent assumptions, estimates, or market factors, including seasonality, differ from Mattel's current estimates, the estimated fair value of Mattel's reporting units may be susceptible to significant changes. The reporting unit that is most susceptible to changes in assumptions and estimates, given its smaller size, is American Girl, as excess fair value over carrying value is a lesser dollar and percentage value than the other reporting units.
11
The change in the carrying amount of goodwill by reporting unit for the nine months ended September 30, 2026 is shown below. Mattel recognized additions to goodwill of approximately $194 million during the nine months ended September 30, 2026 related to the acquisition of Mattel163 in the first quarter of 2026. Brand-specific goodwill held by foreign subsidiaries is allocated to Mattel's reporting units based on the reporting unit selling those brands, thereby causing foreign currency translation impact.
| December 31, 2025 | Acquisition | Currency Exchange Rate Impact | September 30, 2026 | ||||||||||||||||||||
| (In thousands) | |||||||||||||||||||||||
| North America | $ | $ | $ | ( | $ | ||||||||||||||||||
| International | ( | ||||||||||||||||||||||
| American Girl | |||||||||||||||||||||||
| $ | $ | $ | ( | $ | |||||||||||||||||||
Identifiable Intangible Assets, Net
Mattel's identifiable intangible assets, net consisted of the following:
| September 30, 2026 | September 30, 2025 | December 31, 2025 | |||||||||||||||
| (In thousands) | |||||||||||||||||
| Identifiable intangible assets | $ | $ | $ | ||||||||||||||
| Less: accumulated amortization | ( | ( | ( | ||||||||||||||
| $ | $ | $ | |||||||||||||||
Mattel's amortizable identifiable intangible assets primarily consist of trademarks, trade names, and developed technology. Mattel recognized additions to amortizable identifiable intangible assets of approximately $161 million during the nine months ended September 30, 2026 related to the acquisition of Mattel163 in the first quarter of 2026. Mattel tests its amortizable identifiable intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount of the intangible asset may not be recoverable. Mattel's amortizable identifiable intangible assets were no
7. Accrued Liabilities
Accrued liabilities included the following:
| September 30, 2026 | September 30, 2025 | December 31, 2025 | |||||||||||||||
| (In thousands) | |||||||||||||||||
| Deferred income | $ | $ | $ | ||||||||||||||
| Royalties | |||||||||||||||||
| Advertising and promotion | |||||||||||||||||
| Lease liabilities | |||||||||||||||||
| Incentive compensation | |||||||||||||||||
12
8. Supplier Finance Program
9. Seasonal Financing
On July 15, 2024, Mattel entered into a revolving credit agreement (the "Credit Agreement"), among Mattel, as the borrower, Bank of America, N.A., as administrative agent, and the other lenders and financial institutions party thereto, providing for $1.40 billion in aggregate principal amount of senior unsecured revolving credit facilities (the "Credit Facility"). The Credit Facility matures on July 15, 2029. In connection with the Credit Facility, Mattel terminated the commitments and satisfied all outstanding obligations under Mattel's prior revolving credit agreement, dated as of September 15, 2022 (as amended), among Mattel, as the borrower, Bank of America, N.A., as administrative agent, and the other lenders and financial institutions party thereto, which provided for a senior secured revolving credit facility in an aggregate principal amount of $1.40 billion.
Borrowings under the Credit Facility bear interest at a floating rate, which for U.S. dollar-denominated loans can be, at Mattel's option, either (a) Term SOFR (as defined in the Credit Agreement), plus an applicable margin ranging from 0.875 % to 1.375 % per annum, or (b) Base Rate (as defined in the Credit Agreement), plus an applicable margin ranging from 0.000 % to 0.375 % per annum, in each case, such applicable margins to be determined based on Mattel's debt rating.
In addition to paying interest on the outstanding principal amount under the Credit Facility, Mattel is required to pay (i) an unused line fee per annum of the average daily unused portion of the Credit Facility, (ii) a letter of credit fronting fee based on a percentage of the aggregate face amount of outstanding letters of credit, and (iii) certain other customary fees and expenses of the lenders and agents.
The Credit Agreement contains customary covenants, including, but not limited to, (a) restrictions on Mattel's and its subsidiaries' ability to merge and consolidate with other companies, dispose of all or substantially all assets, incur indebtedness, or grant liens or other security interests on assets, in each case, subject to certain customary exceptions and (b) the requirement that the obligations of Mattel under the Credit Facility be guaranteed by any existing or future direct or indirect domestic subsidiary of Mattel that guarantees other indebtedness of Mattel in an aggregate principal or committed amount in excess of $50 million, subject to certain customary exceptions. As of September 30, 2026, no subsidiaries of Mattel were required to guarantee the Credit Facility.
The Credit Agreement requires the maintenance of (a) an interest coverage ratio of not less than 2.75 to 1.00 as of the end of each fiscal quarter and (b) a total leverage ratio as of the end of each fiscal quarter, not to exceed (x) 3.75 to 1.00 with respect to fiscal quarters ending on March 31, June 30, and December 31 of each year, and (y) 4.00 to 1.00 with respect to fiscal quarters ending on September 30 of each year. The total leverage ratio financial covenant is subject to a step-up to 4.25 to 1.00, with respect to fiscal quarters in which certain material acquisitions are consummated, and for a period of four fiscal quarters thereafter, and subject to certain customary exceptions.
As of September 30, 2026, Mattel was in compliance with all covenants contained in the Credit Agreement. Mattel had no no 13 million, $9 million, and $9 million as of September 30, 2026, September 30, 2025, and December 31, 2025, respectively.
13
10. Long-Term Debt
On November 17, 2025, Mattel issued $600.0 million aggregate principal amount of 5.000 % 2025 Senior Notes due November 2030 (the "2025 Notes"). The 2025 Notes were issued pursuant to a base indenture, dated November 17, 2025 (the "Base Indenture") between Mattel and U.S. Bank Trust Company, National Association, as trustee (the "Trustee"), as supplemented by the first supplemental indenture with respect to the 2025 Notes, dated November 17, 2025 (the "Supplemental Indenture" and, together with the Base Indenture, the "Indenture"), between Mattel and the Trustee. The 2025 Notes pay interest semi-annually in arrears on May 17 and November 17 of each year, beginning on May 17, 2026, to the holders of record on the immediately preceding May 1 and November 1, respectively. The 2025 Notes will mature on November 17, 2030.
Prior to October 17, 2030 (one month prior to the maturity date), Mattel may redeem the 2025 Notes at its option, in whole or in part, at any time and from time to time, at a redemption price equal to 100 % of the principal amount of the 2025 Notes being redeemed, plus a corresponding "make-whole premium" as set forth in the Base Indenture, plus, in either case, accrued and unpaid interest thereon to (but not including) the redemption date. Additionally, on or after October 17, 2030, Mattel may redeem the 2025 Notes, in whole or in part, at any time and from time to time, at a redemption price equal to 100 % of the principal amount of the 2025 Notes being redeemed, plus accrued and unpaid interest, if any, to (but not including) the redemption date.
The holders of the 2025 Notes have the right to require Mattel to repurchase the 2025 Notes of any series at 101 % of the principal amount thereof, plus accrued and unpaid interest, if any, to (but not including) the date of repurchase upon the occurrence of a Change of Control Triggering Event (as defined in the Base Indenture), except to the extent that Mattel has exercised its right to redeem all of the 2025 Notes as described above.
The 2025 Notes are Mattel's senior unsecured obligations. Under the terms of the Indenture, the 2025 Notes, without giving effect to collateral arrangements, rank pari passu in right of payment with all existing and future senior indebtedness of Mattel, including indebtedness of Mattel under the Existing Notes and the Credit Agreement (each as defined in the Base Indenture). The 2025 Notes are senior in right of payment to any future subordinated indebtedness of Mattel, if any. The 2025 Notes are structurally subordinated to all existing and future indebtedness and other liabilities of all subsidiaries of Mattel including indebtedness of the subsidiaries that borrow under or guarantee any obligations under the Credit Agreement, if any, and guarantees of the Existing Notes, if any. The 2025 Notes are effectively subordinated to any existing and future secured indebtedness of Mattel, including indebtedness of Mattel under capital leases, if any, to the extent of the value of the collateral securing such indebtedness.
The Indenture governing the 2025 Notes contains covenants that limit Mattel's ability to, among other things, create liens, enter into certain sale and leaseback transactions, or to engage in certain consolidation, merger, and sale of asset transactions. These restrictions are subject to a number of exceptions.
The net proceeds from the 2025 Notes, together with cash on hand, were used to redeem all outstanding 3.375 % 2021 Senior Notes due April 2026 and pay related fees and expenses.
Long-term debt included the following:
| September 30, 2026 | September 30, 2025 | December 31, 2025 | |||||||||||||||
| (In thousands) | |||||||||||||||||
| 2010 Senior Notes due October 2040 | $ | $ | $ | ||||||||||||||
| 2011 Senior Notes due November 2041 | |||||||||||||||||
| 2019 Senior Notes due December 2027 | |||||||||||||||||
| 2021 Senior Notes due April 2026 | |||||||||||||||||
| 2021 Senior Notes due April 2029 | |||||||||||||||||
| 2025 Senior Notes due November 2030 | |||||||||||||||||
| Debt issuance costs and debt discount | ( | ( | ( | ||||||||||||||
| Less: current portion | ( | ||||||||||||||||
| Total long-term debt | $ | $ | $ | ||||||||||||||
14
Mattel's 2019 Senior Notes due 2027 were issued pursuant to an indenture dated November 20, 2019, and its 2021 Senior Notes due 2026 and 2021 Senior Notes due 2029 were issued pursuant to an indenture dated March 19, 2021. These indentures contain covenants that limit Mattel's (and some of its subsidiaries') ability to, among other things: (i) incur additional debt or issue certain preferred shares; (ii) pay dividends on or make other distributions in respect of their capital stock or make other restricted payments; (iii) make investments in unrestricted subsidiaries; (iv) create liens; (v) enter into certain sale/leaseback transactions; (vi) merge or consolidate, or sell, transfer, or otherwise dispose of substantially all of their assets; and (vii) designate future guarantors. The indentures also provided that certain of these covenants would be suspended if Mattel achieved a debt rating of BBB-, Baa3, and/or BBB- (or higher) from any two of S&P, Moody's, and Fitch, respectively, and no event of default has occurred.
11. Accumulated Other Comprehensive Income (Loss)
The following tables present changes in the accumulated balances for each component of other comprehensive income (loss), including current period other comprehensive income (loss) and reclassifications from accumulated other comprehensive income (loss):
| For the Three Months Ended September 30, 2026 | |||||||||||||||||||||||
| Derivative Instruments | Employee Benefit Plans | Currency Translation Adjustments | Total | ||||||||||||||||||||
| (In thousands) | |||||||||||||||||||||||
| Accumulated Other Comprehensive Income (Loss), Net of Tax, as of June 30, 2026 | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
| Other comprehensive income (loss) before reclassifications | ( | ( | |||||||||||||||||||||
| Amounts reclassified from accumulated other comprehensive income (loss) | |||||||||||||||||||||||
| Net change in other comprehensive income (loss) | ( | ( | |||||||||||||||||||||
| Accumulated Other Comprehensive Income (Loss), Net of Tax, as of September 30, 2026 | $ | $ | ( | $ | ( | $ | ( | ||||||||||||||||
| For the Nine Months Ended September 30, 2026 | |||||||||||||||||||||||
| Derivative Instruments | Employee Benefit Plans | Currency Translation Adjustments | Total | ||||||||||||||||||||
| (In thousands) | |||||||||||||||||||||||
| Accumulated Other Comprehensive Income (Loss), Net of Tax, as of December 31, 2025 | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
| Other comprehensive income (loss) before reclassifications | ( | ( | |||||||||||||||||||||
| Amounts reclassified from accumulated other comprehensive income (loss) | |||||||||||||||||||||||
| Net change in other comprehensive income (loss) | ( | ||||||||||||||||||||||
| Accumulated Other Comprehensive Income (Loss), Net of Tax, as of September 30, 2026 | $ | $ | ( | $ | ( | $ | ( | ||||||||||||||||
15
| For the Three Months Ended September 30, 2025 | |||||||||||||||||||||||
| Derivative Instruments | Employee Benefit Plans | Currency Translation Adjustments | Total | ||||||||||||||||||||
| (In thousands) | |||||||||||||||||||||||
| Accumulated Other Comprehensive Income (Loss), Net of Tax, as of June 30, 2025 | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
| Other comprehensive income (loss) before reclassifications | ( | ( | |||||||||||||||||||||
| Amounts reclassified from accumulated other comprehensive income (loss) | ( | ||||||||||||||||||||||
| Net change in other comprehensive income (loss) | ( | ( | |||||||||||||||||||||
| Accumulated Other Comprehensive Income (Loss), Net of Tax, as of September 30, 2025 | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
| For the Nine Months Ended September 30, 2025 | |||||||||||||||||||||||
| Derivative Instruments | Employee Benefit Plans | Currency Translation Adjustments | Total | ||||||||||||||||||||
| (In thousands) | |||||||||||||||||||||||
| Accumulated Other Comprehensive Income (Loss), Net of Tax, as of December 31, 2024 | $ | $ | ( | $ | ( | $ | ( | ||||||||||||||||
| Other comprehensive income (loss) before reclassifications | ( | ||||||||||||||||||||||
| Amounts reclassified from accumulated other comprehensive income (loss) | |||||||||||||||||||||||
| Net change in other comprehensive income (loss) | ( | ||||||||||||||||||||||
| Accumulated Other Comprehensive Income (Loss), Net of Tax, as of September 30, 2025 | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
16
The following tables present the classification and amount of the reclassifications from accumulated other comprehensive income (loss) to the consolidated statements of operations:
| For the Three Months Ended | |||||||||||||||||
| September 30, 2026 | September 30, 2025 | Statements of Operations Classification | |||||||||||||||
| (In thousands) | |||||||||||||||||
| Derivative Instruments: | |||||||||||||||||
| (Loss) gain on foreign currency forward exchange and other contracts | $ | ( | $ | Cost of sales | |||||||||||||
| Tax effect | ( | Provision for/benefit from income taxes | |||||||||||||||
| $ | ( | $ | Net income/loss | ||||||||||||||
| Employee Benefit Plans: | |||||||||||||||||
| Amortization of prior service (cost) credit (a) | $ | ( | $ | Other non-operating income/expense, net | |||||||||||||
| Recognized actuarial loss (a) | ( | ( | Other non-operating income/expense, net | ||||||||||||||
| ( | ( | ||||||||||||||||
| Tax effect | Provision for/benefit from income taxes | ||||||||||||||||
| $ | ( | $ | ( | Net income/loss | |||||||||||||
| For the Nine Months Ended | |||||||||||||||||
| September 30, 2026 | September 30, 2025 | Statements of Operations Classification | |||||||||||||||
| (In thousands) | |||||||||||||||||
| Derivative Instruments: | |||||||||||||||||
| Loss on foreign currency forward exchange and other contracts | $ | ( | $ | ( | Cost of sales | ||||||||||||
| Tax effect | ( | Provision for/benefit from income taxes | |||||||||||||||
| $ | ( | $ | ( | Net income/loss | |||||||||||||
| Employee Benefit Plans: | |||||||||||||||||
| Amortization of prior service (cost) credit (a) | $ | ( | $ | Other non-operating income/expense, net | |||||||||||||
| Recognized actuarial loss (a) | ( | ( | Other non-operating income/expense, net | ||||||||||||||
| ( | ( | ||||||||||||||||
| Tax effect | Provision for/benefit from income taxes | ||||||||||||||||
| $ | ( | $ | ( | Net income/loss | |||||||||||||
(a)The amortization of prior service (cost) credit and recognized actuarial loss are included in the computation of net periodic benefit cost. Refer to "Note 16 to the Consolidated Financial Statements—Employee Benefit Plans" for additional information regarding Mattel's net periodic benefit cost.
Currency Translation Adjustments
During the nine months ended September 30, 2026, currency translation adjustments, before reclassification, resulted in a net loss of $19.3 million, primarily due to the weakening of the Euro, Indonesian rupiah, and British pound sterling against the U.S. dollar, partially offset by the strengthening of the Chinese yuan against the U.S. dollar. In connection with the acquisition of Mattel163, $2.7 million of accumulated currency translation losses related to Mattel's previously held equity interest were recognized in other non-operating (income) expense, net within the consolidated statement of operations.
During the nine months ended September 30, 2025, currency translation adjustments resulted in a net gain of $105.7 million, primarily due to the strengthening of the Russian ruble, Mexican peso, and British pound sterling against the U.S. dollar.
17
12. Foreign Currency Transaction Exposure
Currency transaction gains (losses) included in the consolidated statements of operations were as follows:
| For the Three Months Ended | |||||||||||||||||
| September 30, 2026 | September 30, 2025 | Statements of Operations Classification | |||||||||||||||
| (In thousands) | |||||||||||||||||
| Currency transaction losses, net | $ | ( | $ | ( | Operating income/loss | ||||||||||||
| Currency transaction (losses) gains, net | ( | Other non-operating income/expense, net | |||||||||||||||
| Currency transaction losses, net | $ | ( | $ | ( | |||||||||||||
| For the Nine Months Ended | |||||||||||||||||
| September 30, 2026 | September 30, 2025 | Statements of Operations Classification | |||||||||||||||
| (In thousands) | |||||||||||||||||
| Currency transaction losses, net | $ | ( | $ | ( | Operating income/loss | ||||||||||||
| Currency transaction losses, net | ( | ( | Other non-operating income/expense, net | ||||||||||||||
| Currency transaction losses, net | $ | ( | $ | ( | |||||||||||||
13. Derivative Instruments
Mattel seeks to mitigate its exposure to foreign currency transaction risk by monitoring its foreign currency transaction exposure for the year and partially hedging such exposure using foreign currency forward exchange contracts. Mattel uses foreign currency forward exchange contracts as cash flow hedges primarily to hedge its purchases and sales of inventory denominated in foreign currencies. These contracts have maturity dates of up to 24 months. These derivative instruments are designated as cash flow hedges, and are reported in Mattel's consolidated balance sheets at fair value, with changes in the fair value recorded in other comprehensive income ("OCI") and subsequently reclassified into earnings when the hedged transactions are recognized in earnings. Mattel uses foreign currency forward exchange contracts to hedge intercompany loans and advances denominated in foreign currencies. Mattel does not use hedge accounting for these contracts, and as such, changes in fair value are recorded in the period of change in the consolidated statements of operations. Mattel utilizes derivative contracts to hedge certain purchases of commodities, which were not material. As of September 30, 2026, September 30, 2025, and December 31, 2025, Mattel held foreign currency forward exchange contracts and other commodity derivative instruments, with notional amounts of approximately $815 million, $840 million, and $677 million, respectively.
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The following tables present Mattel's derivative assets and liabilities:
| Derivative Assets | |||||||||||||||||||||||
| Balance Sheet Classification | Fair Value | ||||||||||||||||||||||
| September 30, 2026 | September 30, 2025 | December 31, 2025 | |||||||||||||||||||||
| (In thousands) | |||||||||||||||||||||||
| Derivatives Designated as Hedging Instruments: | |||||||||||||||||||||||
| Foreign currency forward exchange and other contracts | Prepaid expenses and other current assets | $ | $ | $ | |||||||||||||||||||
| Foreign currency forward exchange and other contracts | Other noncurrent assets | ||||||||||||||||||||||
| Total Derivatives Designated as Hedging Instruments | $ | $ | $ | ||||||||||||||||||||
| Derivatives Not Designated as Hedging Instruments: | |||||||||||||||||||||||
| Foreign currency forward exchange and other contracts | Prepaid expenses and other current assets | $ | $ | $ | |||||||||||||||||||
| Total Derivatives Not Designated as Hedging Instruments | $ | $ | $ | ||||||||||||||||||||
| $ | $ | $ | |||||||||||||||||||||
| Derivative Liabilities | |||||||||||||||||||||||
| Balance Sheet Classification | Fair Value | ||||||||||||||||||||||
| September 30, 2026 | September 30, 2025 | December 31, 2025 | |||||||||||||||||||||
| (In thousands) | |||||||||||||||||||||||
| Derivatives Designated as Hedging Instruments: | |||||||||||||||||||||||
| Foreign currency forward exchange and other contracts | Accrued liabilities | $ | $ | $ | |||||||||||||||||||
| Foreign currency forward exchange and other contracts | Other noncurrent liabilities | ||||||||||||||||||||||
| Total Derivatives Designated as Hedging Instruments | $ | $ | $ | ||||||||||||||||||||
| Derivatives Not Designated as Hedging Instruments: | |||||||||||||||||||||||
| Foreign currency forward exchange and other contracts | Accrued liabilities | $ | $ | $ | |||||||||||||||||||
| Total Derivatives Not Designated as Hedging Instruments | $ | $ | $ | ||||||||||||||||||||
| $ | $ | $ | |||||||||||||||||||||
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The following tables present the classification and amount of gains and losses, net of tax, from derivatives reported in the consolidated statements of operations:
| Derivatives Designated as Hedging Instruments | |||||||||||||||||
| For the Three Months Ended | |||||||||||||||||
| September 30, 2026 | September 30, 2025 | Statements of Operations Classification | |||||||||||||||
| (In thousands) | |||||||||||||||||
| Foreign Currency Forward Exchange and Other Contracts: | |||||||||||||||||
| Amount of gains recognized in OCI | $ | $ | |||||||||||||||
| Amount of (losses) gains reclassified from accumulated OCI to the consolidated statements of operations | ( | Cost of sales | |||||||||||||||
| Derivatives Designated as Hedging Instruments | |||||||||||||||||
| For the Nine Months Ended | |||||||||||||||||
| September 30, 2026 | September 30, 2025 | Statements of Operations Classification | |||||||||||||||
| (In thousands) | |||||||||||||||||
| Foreign Currency Forward Exchange and Other Contracts: | |||||||||||||||||
| Amount of gains (losses) recognized in OCI | $ | $ | ( | ||||||||||||||
| Amount of losses reclassified from accumulated OCI to consolidated statements of operations | ( | ( | Cost of sales | ||||||||||||||
The gains and losses reclassified from accumulated other comprehensive loss to the consolidated statements of operations during the three and nine months ended September 30, 2026 and 2025 were offset by the recognition of the underlying hedged transactions.
As of September 30, 2026, approximately $7 million of net gains included in accumulated other comprehensive income (loss) are expected to be reclassified into the consolidated statements of operations within the next twelve months.
| Derivatives Not Designated as Hedging Instruments | |||||||||||||||||
| For the Three Months Ended | |||||||||||||||||
| September 30, 2026 | September 30, 2025 | Statements of Operations Classification | |||||||||||||||
| (In thousands) | |||||||||||||||||
| Amount of Net Losses Recognized in the Statements of Operations: | |||||||||||||||||
| Foreign currency forward exchange and other contracts | $ | ( | $ | ( | Other non-operating income/expense, net | ||||||||||||
| Derivatives Not Designated as Hedging Instruments | |||||||||||||||||
| For the Nine Months Ended | |||||||||||||||||
| September 30, 2026 | September 30, 2025 | Statements of Operations Classification | |||||||||||||||
| (In thousands) | |||||||||||||||||
| Amount of Net Gains Recognized in the Statements of Operations: | |||||||||||||||||
| Foreign currency forward exchange and other contracts | $ | $ | Other non-operating income/expense, net | ||||||||||||||
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The net gains and losses on foreign currency forward exchange and other contracts recognized in the consolidated statements of operations during the three and nine months ended September 30, 2026 and September 30, 2025 were offset by foreign currency transaction gains and losses on the related underlying balances.
14. Fair Value Measurements
The following tables present information about Mattel's financial assets and liabilities measured and reported in the financial statements at fair value on a recurring basis as of September 30, 2026, September 30, 2025, and December 31, 2025 and indicate the fair value hierarchy of the valuation techniques utilized to determine such fair value. The three levels of the fair value hierarchy are as follows:
•Level 1 – Valuations based on unadjusted quoted prices in active markets for identical assets or liabilities that the entity has the ability to access.
•Level 2 – Valuations based on quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable data for substantially the full term of the assets or liabilities.
•Level 3 – Valuations based on inputs that are unobservable, supported by little or no market activity, and that are significant to the fair value of the assets or liabilities.
| September 30, 2026 | |||||||||||||||||||||||
| Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||
| (In thousands) | |||||||||||||||||||||||
| Assets: | |||||||||||||||||||||||
| Foreign currency forward exchange and other contracts (a) | $ | $ | $ | $ | |||||||||||||||||||
| Liabilities: | |||||||||||||||||||||||
| Foreign currency forward exchange and other contracts (a) | $ | $ | $ | $ | |||||||||||||||||||
| September 30, 2025 | |||||||||||||||||||||||
| Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||
| (In thousands) | |||||||||||||||||||||||
| Assets: | |||||||||||||||||||||||
| Foreign currency forward exchange and other contracts (a) | $ | $ | $ | $ | |||||||||||||||||||
| Liabilities: | |||||||||||||||||||||||
| Foreign currency forward exchange and other contracts (a) | $ | $ | $ | $ | |||||||||||||||||||
| December 31, 2025 | |||||||||||||||||||||||
| Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||
| (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.
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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.
The estimated fair value of Mattel's long-term debt was $2.22 billion (compared to an aggregate principal amount of $2.35 billion) as of September 30, 2026, $2.31 billion (compared to an aggregate principal amount of $2.35 billion) as of September 30, 2025, and $2.32 billion (compared to an aggregate principal amount of $2.35 billion) as of December 31, 2025. 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.
15. Earnings Per Share
The following table reconciles basic and diluted earnings per common share for the three and nine months ended September 30, 2026 and 2025:
| For the Three Months Ended | For the Nine Months Ended | ||||||||||||||||||||||
| September 30, 2026 | September 30, 2025 | September 30, 2026 | September 30, 2025 | ||||||||||||||||||||
| (In thousands, except per share amounts) | |||||||||||||||||||||||
| Basic: | |||||||||||||||||||||||
| Net income | $ | $ | $ | $ | |||||||||||||||||||
| 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 | $ | $ | $ | $ | |||||||||||||||||||
16. Employee Benefit Plans
Mattel and certain of its subsidiaries have qualified and nonqualified retirement plans covering substantially all employees of these companies, which are more fully described in Part II, Item 8 "Financial Statements and Supplementary Data—Note 4 to the Consolidated Financial Statements–Employee Benefit Plans" in the 2025 Annual Report on Form 10-K.
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The components of Mattel's net periodic benefit cost for defined benefit pension plans were as follows:
| For the Three Months Ended | For the Nine Months Ended | ||||||||||||||||||||||
| September 30, 2026 | September 30, 2025 | September 30, 2026 | September 30, 2025 | ||||||||||||||||||||
| (In thousands) | |||||||||||||||||||||||
| Service cost | $ | $ | $ | $ | |||||||||||||||||||
| Interest cost | |||||||||||||||||||||||
| Expected return on plan assets | ( | ( | ( | ( | |||||||||||||||||||
| Amortization of prior service cost | |||||||||||||||||||||||
| Recognized actuarial loss | |||||||||||||||||||||||
| Net periodic benefit cost | $ | $ | $ | $ | |||||||||||||||||||
The components of Mattel's net periodic benefit credit for postretirement benefit plans were as follows:
| For the Three Months Ended | For the Nine Months Ended | ||||||||||||||||||||||
| September 30, 2026 | September 30, 2025 | September 30, 2026 | September 30, 2025 | ||||||||||||||||||||
| (In thousands) | |||||||||||||||||||||||
| Interest 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 nine months ended September 30, 2026, Mattel made cash contributions totaling approximately $4 million related to its defined benefit pension and postretirement benefit plans. During the remainder of 2026, Mattel expects to make additional cash contributions of approximately $10 million.
During the second quarter of 2026, Mattel approved the termination of the Cash Balance Plan, a U.S. qualified defined benefit pension plan. Mattel expects to complete the termination in 2027 through lump-sum distributions and the purchase of group annuity contracts, subject to regulatory requirements.
17. Share-Based Payments
Mattel has various stock compensation plans, which are described in Part II, Item 8 "Financial Statements and Supplementary Data—Note 9 to the Consolidated Financial Statements—Share-Based Payments" in the 2025 Annual Report on Form 10-K. Under the Mattel, Inc. Amended and Restated 2010 Equity and Long-Term Compensation Plan, Mattel has the ability to grant nonqualified stock options, incentive stock options, stock appreciation rights, restricted stock, restricted stock units ("RSUs"), performance RSUs ("performance awards"), dividend equivalent rights, and shares of common stock to officers, employees, non-employee directors, and consultants providing services to Mattel. Stock options are granted with exercise prices at the fair market value of Mattel's common stock on the applicable grant date and expire no later than ten years from the grant date. Stock options, RSUs, and performance awards related to Mattel's long-term incentive program ("LTIP") generally provide for vesting over, or at the end of, a period of three years from the grant date.
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Compensation expense related to stock options, RSUs, and performance awards was as follows:
| For the Three Months Ended | For the Nine Months Ended | ||||||||||||||||||||||
| September 30, 2026 | September 30, 2025 | September 30, 2026 | September 30, 2025 | ||||||||||||||||||||
| (In thousands) | |||||||||||||||||||||||
| Stock option compensation expense | $ | $ | $ | $ | |||||||||||||||||||
| RSU compensation expense | |||||||||||||||||||||||
| Performance award compensation expense | ( | ( | |||||||||||||||||||||
| $ | ( | $ | $ | $ | |||||||||||||||||||
Share-based compensation for the three and nine months ended September 30, 2026 included the reversal of previously recognized compensation expense resulting from the expected forfeiture of unvested share-based awards in connection with the resignation and subsequent departure of Mattel’s former Chief Executive Officer, which occurred on September 29, 2026 and October 2, 2026, respectively.
As of September 30, 2026, $94.3 million of compensation expense related to unvested share-based awards remained unrecognized and is expected to be recognized over a weighted-average period of 2.0 years.
Mattel uses treasury shares purchased under its share repurchase program to satisfy exercises of stock options and the vesting of RSUs and performance awards. Cash received from stock option exercises, net of taxes, was $3.6 million and $5.5 million for the nine months ended September 30, 2026 and 2025, respectively.
On May 1, 2026, annual performance awards were granted to officers and key employees of Mattel under the 2026 LTIP. Those awards may be earned based on Mattel's performance against three-year cumulative Adjusted Net Income goals and Mattel's relative Total Shareholder Return ("TSR"), as measured over the applicable performance periods. Performance awards granted under the 2025 LTIP may be earned based on Mattel's relative TSR over a three-year performance measurement period. Performance awards granted prior to 2025 that impact the periods presented may be earned based on Mattel's performance against three-year 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 2026 LTIP and prior LTIP awards may range from 0 % to 200 % of the target award, depending on performance against the applicable metrics. The grant-date fair value of the annual performance awards is recognized over the service period, which commences on the date of grant and ends upon the completion of the performance period and approval of applicable company performance measures and relative TSR for the respective performance periods.
In October 2026, Mattel granted certain share-based awards to new executive officers, in connection with their commencement of employment:
(i)a Make-Whole RSU award totaling 0.5 million restricted stock units with an estimated grant date fair value of $7.7 million. The award vested upon grant but it is subject to repayment if employment is terminated under certain circumstances during the two-year period following the executive's start date. The repayment provisions result in a substantive two-year service condition and, accordingly compensation in the amount subject to repayment will be recognized over the two-year service period.
(ii)Inducement Performance-Based RSU awards ("Inducement PSU") totaling 0.7 million performance-based restricted stock units, which will cliff vest at the end of the three-year performance period beginning on the respective grant dates, generally subject to continued employment with Mattel and Mattel achieving a specified relative total shareholder return ("TSR") performance. The grant date fair value of the awards was estimated using a Monte Carlo valuation methodology and totaled $8.5 million, in aggregate, which will be recognized over the respective three-year service periods.
(iii)Annual Long-Term Incentive Awards totaling 0.5 million performance awards granted under the 2026 LTIP and 0.5 million RSUs with terms consistent with Mattel’s 2026 annual equity awards to other senior executives. The estimated grant date fair values of the performance awards and the RSUs were $9.2 million and $8.7 million, respectively.
The aggregate estimated grant-date fair value of these awards was approximately $34.1 million, which will be recognized as compensation expense over the applicable service periods.
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18. Other Selling and Administrative Expenses
Other selling and administrative expenses included the following:
| For the Three Months Ended | For the Nine Months Ended | ||||||||||||||||||||||
| September 30, 2026 | September 30, 2025 | September 30, 2026 | September 30, 2025 | ||||||||||||||||||||
| (In thousands) | |||||||||||||||||||||||
| Design and development (a) | $ | $ | $ | $ | |||||||||||||||||||
| Identifiable intangible asset amortization | |||||||||||||||||||||||
(a)Design and development expenses included incentive and share-based compensation expenses totaling approximately $1 million and $12 million during the three and nine months ended September 30, 2026, respectively. During the three and nine months ended September 30, 2025, incentive and share-based compensation expenses were not included in design and development expenses and were not
19. Restructuring Charges
Optimizing for Profitable Growth
On February 7, 2024, Mattel announced the Optimizing for Profitable Growth program (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.
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 Nine Months Ended | ||||||||||||||||||||||
| September 30, 2026 | September 30, 2025 | September 30, 2026 | September 30, 2025 | ||||||||||||||||||||
| (In thousands) | |||||||||||||||||||||||
| Cost of sales (a) | $ | $ | $ | $ | |||||||||||||||||||
| 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 income in "Note 22 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 unallocated corporate and other operating expenses in "Note 22 to the Consolidated Financial Statements—Segment Information."
The following tables summarize Mattel's severance and other restructuring charges activity within operating income related to the OPG program:
| Liability at December 31, 2025 | Charges | Payments/Utilization | Liability at September 30, 2026 | ||||||||||||||||||||
| (In thousands) | |||||||||||||||||||||||
| Severance | $ | $ | $ | ( | $ | ||||||||||||||||||
| Other restructuring charges (a) | ( | ||||||||||||||||||||||
| $ | $ | $ | ( | $ | |||||||||||||||||||
25
| Liability at December 31, 2024 | Charges | Payments/Utilization | Liability at September 30, 2025 | ||||||||||||||||||||
| (In thousands) | |||||||||||||||||||||||
| Severance | $ | $ | $ | ( | $ | ||||||||||||||||||
| Other restructuring charges (a) | ( | ||||||||||||||||||||||
| $ | $ | $ | ( | $ | |||||||||||||||||||
(a)Other restructuring charges consist primarily of expenses associated with the consolidation of manufacturing and distribution facilities.
As of September 30, 2026, in connection with the OPG program, Mattel recorded cumulative severance and other restructuring charges of approximately $136 million, which included approximately $25 million of severance charges recorded within other selling and administrative expenses during 2023. Cumulative other restructuring charges include approximately $5 million of non-cash charges. Total cash expenditures are expected to be up to approximately $140 million, and total non-cash charges are expected to be approximately $5 million.
20. Income Taxes
Mattel's provision for income taxes was $96.8 million and $64.6 million for the three and nine months ended September 30, 2026, respectively, and $86.9 million and $72.5 million for the three and nine months ended September 30, 2025, respectively. Mattel recognized a net discrete income tax expense of $9.9 million for the three months ended September 30, 2026, primarily related to income tax expense associated with International Emergency Economic Powers Act ("IEEPA") tariff refunds, partially offset by discrete tax benefits related to previously unrecognized tax benefits. Mattel recognized a net discrete income tax expense of $10.7 million for the nine months ended September 30, 2026, primarily related to income tax expense associated with IEEPA tariff refunds and interest expense accrued on previously unrecognized tax benefits, partially offset by discrete tax benefits related to previously unrecognized tax benefits. Mattel recognized a net discrete income tax benefit of $2.3 million during the three months ended September 30, 2025. Mattel recognized a net discrete income tax benefit of $12.6 million for the nine months ended September 30, 2025, primarily related to a change in its indefinite reinvestment assertion with respect to certain foreign subsidiary earnings.
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 nine months ended September 30, 2026 and 2025, Mattel had no changes to the valuation allowance recorded against its deferred tax assets.
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 has evaluated the OBBBA provisions that have been enacted and has included the related impact in the provision for income taxes for the three and nine months ended September 30, 2026.
21. Contingencies
Litigation Related to Yellowstone do Brasil Ltda.
In April 1999, Yellowstone do Brasil Ltda. (formerly known as Trebbor Informática Ltda.) ("Yellowstone") filed a lawsuit against Mattel do Brasil before the 15th Civil Court of Curitiba, State of Parana, requesting the annulment of its security bonds and promissory notes given to Mattel do Brasil as well as damages due to an alleged breach of an oral exclusive distribution agreement between the parties relating to the supply and sale of toys in Brazil. Yellowstone's complaints sought alleged loss of profits plus an unspecified amount of damages.
Mattel do Brasil filed its defenses to these claims and simultaneously presented a counterclaim for unpaid accounts receivable for goods supplied to Yellowstone.
In April 2018, Mattel do Brasil entered into a settlement agreement to resolve this matter, but the settlement remains the subject of ongoing appeals.
26
In October 2018, the Superior Court of Justice issued a final ruling in favor of Yellowstone on the merits of Yellowstone's claims. Previously, the courts had ruled in Mattel's favor on its counterclaim.
In October 2019, Mattel reached an agreement with Yellowstone's former counsel regarding payment of the attorney's fees portion of the judgment. In November 2019, Yellowstone initiated an action to enforce its judgment against Mattel, but did not account for an offset for Mattel's counterclaim. In January 2020, Mattel obtained an injunction, staying Yellowstone's enforcement action pending resolution of Mattel's appeal to enforce the parties' April 2018 settlement. As of September 30, 2026, Mattel assessed its probable loss related to this matter and has accrued an estimated liability, which is not material.
Litigation Related to the Fisher-Price Rock 'n Play Sleeper
A products liability lawsuit filed in April 2023 remains pending against Fisher-Price, Inc. and Mattel, Inc. alleging that a product defect in the Fisher-Price Rock 'n Play Sleeper (the "Sleeper") caused the fatality of a child. In August 2026, a settlement in that case was reached, which is subject to court approval. A similar products liability lawsuit was filed in October 2026 in Los Angeles Superior Court. More than sixty other lawsuits involving the Sleeper have been settled and/or dismissed.
The lawsuits seek compensatory damages, punitive damages, attorneys' fees, costs, and interest. Mattel believes that it has substantial defenses to the allegations made and intends to vigorously defend against them. As of September 30, 2026, Mattel assessed its probable loss related to the matter and has accrued an estimated liability, which is not material.
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. In February 2026, the parties entered into a stipulation, which the court subsequently entered, permitting an immediate appeal to the Delaware Supreme Court of the issues decided to date. As of September 30, 2026, Mattel assessed its probable loss related to this matter and has accrued an estimated liability, which is not material.
Litigation Related to the Fisher-Price Snuga Swings
A number of putative class action lawsuits were filed against Fisher-Price, Inc. and Mattel, Inc. between October 2024 and February 2025 asserting claims for false advertising, breach of contract, breach of warranty, fraud, negligence, and other claims in connection with the marketing and sale of Fisher-Price Snuga Swings (the "Swings"). In general, the lawsuits allege that the Swings were falsely marketed and sold as safe for infant use, particularly infant sleep, and failed to disclose a risk of suffocation. The lawsuits propose nationwide and several state consumer classes comprised of those who purchased the Swings. The lawsuits have been consolidated before a single judge in the United States District Court for the Western District of New York. In May 2025, the parties reached a contingent settlement of the litigation, which is subject to court approval.
The lawsuits seek unspecified compensatory damages, punitive and treble damages, statutory damages, restitution, rescission, disgorgement, attorneys' fees, costs, interest, and injunctive relief. Mattel believes that it has substantial defenses to the allegations in the lawsuits and, to the extent the settlement is not finalized or approved, intends to vigorously defend against them. As of September 30, 2026, Mattel assessed its probable loss related to this matter and has accrued an estimated liability, which is not material.
U.S. Tariff Recovery
In February 2026, the U.S. Supreme Court ruled that tariffs imposed under IEEPA on goods imported into the United States were unauthorized. On March 4, 2026, the U.S. Court of International Trade ("CIT") issued an order directing the U.S. Customs and Border Protection ("CBP") to process refunds of the IEEPA tariffs. CBP subsequently implemented a phased refund process through its Consolidated Administration and Processing of Entries system, launching Phase 1 on April 20, 2026 and Phase 2 on June 29, 2026, and Phase 3 on October 6, 2026, initially for certain eligible importers. The CIT's refund order has been appealed, and the IEEPA tariffs and related refund framework remain subject to ongoing legal proceedings, further guidance from CBP, as well as other refund process developments. Following the U.S. Supreme Court's decision on IEEPA tariffs, temporary global tariffs were imposed on imports under Section 122 of the Trade Act of 1974 ("Section 122"), which expired on July 24, 2026. These Section 122 tariffs are currently subject to legal challenge and in May 2026, the CIT issued a ruling that the Section 122 tariffs are unauthorized by the statute, although this ruling is currently stayed pending appeal. Following the expiration of the Section 122 tariffs, additional tariffs have been imposed under Section 301 of the Trade Act of 1974 and other statutory authorities.
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Mattel accounts for potential refunds of IEEPA tariffs as gain contingencies. During the three and nine months ended September 30, 2026, Mattel received and recognized approximately $88 4
Litigation Related to IEEPA Tariffs
In July and August 2026, three putative class actions were filed in the United States District Court for the Central District of California against Mattel, Inc., American Girl, LLC, and/or American Girl Brands, LLC asserting claims for unjust enrichment, money had and received, unfair competition under section 17200 of the California Business & Professions Code, and declaratory judgment in connection with IEEPA tariff refunds. In general, the lawsuits allege that Mattel and American Girl should not be able to retain IEEPA refunds they receive if costs associated with those tariffs were previously passed on to consumers. The lawsuits propose a nationwide class of consumers who purchased products with raised prices due to government tariffs.
The lawsuits seek unspecified compensatory damages, statutory damages, punitive damages, restitution, disgorgement, attorneys' fees, costs, interest, and declaratory and injunctive relief. Mattel believes that it has substantial defenses to the allegations in the lawsuits and intends to vigorously defend against them. A reasonable estimate of the amount of any possible loss or range of loss cannot be made at this time.
28
22. Segment Information
Mattel designs, manufactures, and markets a broad variety of toy products worldwide, which are sold to its customers and directly to consumers.
Segment Data
Mattel's reportable segments are: (i) North America and (ii) International. The North America and International segments sell products across Mattel's categories, although some products are developed or adapted for particular international markets.
Mattel's reportable segments are aligned to the structure used by its Chief Executive Officer, who is also the Chief Operating Decision Maker ("CODM"), to allocate resources and assess performance. Mattel's CODM evaluates segment performance based on each segment's income. The CODM also uses this metric in the annual budgeting and quarterly forecasting process to inform decisions about allocating capital and other resources to each segment.
The following tables present information regarding segment income and significant expense information for Mattel's reportable segments. Unallocated corporate and other operating expenses include operating costs not allocated to individual segments, including charges related to incentive and share-based compensation, corporate headquarters functions managed on a worldwide basis, the impact of changes in foreign currency exchange rates on intercompany transactions, and certain severance and other restructuring costs. It is impracticable for Mattel to present net sales by categories, brands, or products, as trade discounts and other allowances are generally recorded in the financial accounting systems by customer.
| For the Three Months Ended | For the Nine Months Ended | |||||||||||||||||||||||||
| September 30, 2026 | September 30, 2025 | September 30, 2026 | September 30, 2025 | |||||||||||||||||||||||
| (In thousands) | ||||||||||||||||||||||||||
| North America Segment: | ||||||||||||||||||||||||||
| Net sales | $ | $ | $ | $ | ||||||||||||||||||||||
| Less: | ||||||||||||||||||||||||||
| Cost of sales (a) | ||||||||||||||||||||||||||
| Advertising and promotion expenses | ||||||||||||||||||||||||||
| Other selling and administrative expenses | ||||||||||||||||||||||||||
| North America segment expenses | ||||||||||||||||||||||||||
| North America segment income | $ | $ | $ | $ | ||||||||||||||||||||||
| International Segment: | ||||||||||||||||||||||||||
| Net sales | $ | $ | $ | $ | ||||||||||||||||||||||
| Less: | ||||||||||||||||||||||||||
| Cost of sales (a) | ||||||||||||||||||||||||||
| Advertising and promotion expenses | ||||||||||||||||||||||||||
| Other selling and administrative expenses | ||||||||||||||||||||||||||
| International segment expenses | ||||||||||||||||||||||||||
| International segment income | $ | $ | $ | $ | ||||||||||||||||||||||
| Total Reportable Segments: | ||||||||||||||||||||||||||
| Net sales | $ | $ | $ | $ | ||||||||||||||||||||||
| Less: | ||||||||||||||||||||||||||
| Total segment expenses | ||||||||||||||||||||||||||
| Total segment income | $ | $ | $ | $ | ||||||||||||||||||||||
(a)Cost of sales included the impact of severance and other restructuring charges of less than $1 million and approximately $2 million for the three months ended September 30, 2026 and September 30, 2025, respectively, and approximately $1 million and $6 million for the nine months ended September 30, 2026 and September 30, 2025, respectively, which were allocated to the North America and International segments.
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The following table is a reconciliation of segment income to income before income taxes for the periods indicated:
| For the Three Months Ended | For the Nine Months Ended | |||||||||||||||||||||||||
| September 30, 2026 | September 30, 2025 | September 30, 2026 | September 30, 2025 | |||||||||||||||||||||||
| (In thousands) | ||||||||||||||||||||||||||
| Total segment income | $ | $ | $ | $ | ||||||||||||||||||||||
| Unallocated corporate and other operating expenses (a) | ||||||||||||||||||||||||||
| Total operating income | ||||||||||||||||||||||||||
| Interest expense | ||||||||||||||||||||||||||
| Interest (income) | ( | ( | ( | ( | ||||||||||||||||||||||
| Other non-operating expense (income), net | ( | |||||||||||||||||||||||||
| Income before income taxes | $ | $ | $ | $ | ||||||||||||||||||||||
(a)For the three months ended September 30, 2026 and September 30, 2025, unallocated corporate and other operating expenses included the impact of: 1) incentive compensation of approximately $(2 ) million and $8 million, respectively, 2) share-based compensation of approximately $(1 ) million and $22 million, respectively, and 3) severance and other restructuring charges of approximately $3 million and $1 million, respectively.
For the nine months ended September 30, 2026 and September 30, 2025, unallocated corporate and other operating expenses included the impact of: 1) incentive compensation of approximately $46 million and $51 million, respectively, 2) share-based compensation of approximately $32 million and $61 million, respectively, and 3) severance and other restructuring charges of approximately $22 million and $24 million, respectively.
The following tables present information regarding depreciation and amortization by segment, as well as assets by segment.
| For the Three Months Ended | For the Nine Months Ended | ||||||||||||||||||||||
| September 30, 2026 | September 30, 2025 | September 30, 2026 | September 30, 2025 | ||||||||||||||||||||
| (In thousands) | |||||||||||||||||||||||
| Depreciation and Amortization by Segment | |||||||||||||||||||||||
| North America | $ | $ | $ | $ | |||||||||||||||||||
| International | |||||||||||||||||||||||
| Corporate and other | |||||||||||||||||||||||
| Depreciation and amortization | $ | $ | $ | $ | |||||||||||||||||||
Segment assets were comprised of accounts receivable and inventories, net of applicable reserves and allowances.
| September 30, 2026 | September 30, 2025 | December 31, 2025 | |||||||||||||||
| (In thousands) | |||||||||||||||||
| Assets by Segment | |||||||||||||||||
| North America | $ | $ | $ | ||||||||||||||
| International | |||||||||||||||||
| Corporate and other | |||||||||||||||||
| Accounts receivable and inventories, net | $ | $ | $ | ||||||||||||||
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Geographic Information
The following table presents information regarding Mattel's net sales by geographic area. Net sales are attributed to countries based on the location of the customer:
| For the Three Months Ended | For the Nine Months Ended | ||||||||||||||||||||||
| September 30, 2026 | September 30, 2025 | September 30, 2026 | September 30, 2025 | ||||||||||||||||||||
| (In thousands) | |||||||||||||||||||||||
| Net Sales by Geographic Area | |||||||||||||||||||||||
| North America | $ | $ | $ | $ | |||||||||||||||||||
| International | |||||||||||||||||||||||
| EMEA | |||||||||||||||||||||||
| Latin America | |||||||||||||||||||||||
| Asia Pacific | |||||||||||||||||||||||
| Total International | |||||||||||||||||||||||
| Net sales | $ | $ | $ | $ | |||||||||||||||||||
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23. New Accounting Pronouncements
Recently Adopted Accounting Pronouncements
In July 2025, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2025-05, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets. ASU 2025-05 provides the option to apply a practical expedient to address implementation challenges related to the estimation of expected credit losses for current accounts receivable and current contract assets arising from transactions accounted for under revenue recognition (Topic 606) and assets acquired through business combinations. The practical expedient allows entities to assume that current conditions as of the balance sheet date remain unchanged over the life of these assets when developing forecasts. The guidance allows entities to bypass the requirement to incorporate macro-economic data into their forecast when such data is not expected to materially affect the estimate. Mattel adopted the guidance in ASU 2025-05 effective January 1, 2026 prospectively and applied the practical expedient. The adoption of this new accounting standard did not have a material impact on Mattel's consolidated financial statements.
Accounting Pronouncements Not Yet Adopted
In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses for public business entities. ASU 2024-03 requires enhanced disclosures of each expense caption in the income statement to improve transparency and provide financial statement users with more detailed information about the nature, amount, and timing of expenses impacting financial performance. Additionally, in January 2025, the FASB issued ASU 2025-01 to clarify the effective date of ASU 2024-03. The guidance in ASU 2024-03 is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027. Early adoption is permitted. The ASU may be applied either (1) prospectively to financial statements issued for reporting periods after the effective date of this ASU or (2) retrospectively to all prior periods presented in the financial statements. Mattel is currently evaluating the impact of the adoption of ASU 2024-03 on its consolidated financial statements.
In September 2025, the FASB issued ASU 2025-06, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software. ASU 2025-06 modernizes certain aspects of the accounting for software costs to develop or obtain software for internal use under Accounting Standards Codification 350-40. The ASU requires entities to begin capitalizing software costs when management authorizes and commits to funding the software project, and it is probable that the project will be completed and the software will be used for its intended purpose. The guidance in ASU 2025-06 is effective for fiscal years beginning after December 15, 2027, and interim periods within those fiscal years. Early adoption is permitted. The amendments in ASU 2025-06 permit entities to apply the new guidance using a prospective, retrospective, or modified transition approach. Mattel is currently evaluating the impact of the adoption of ASU 2025-06 on its consolidated financial statements.
In December 2025, the FASB issued ASU 2025-11, Interim Reporting (Topic 270): Narrow-Scope Improvements, which clarifies the applicability of Topic 270 and interim disclosure requirements, including a principle requiring disclosure of events since the end of the most recent annual reporting period that have a material impact on an entity. The amendments are effective for interim reporting periods within fiscal years beginning after December 15, 2027, with early adoption permitted. Mattel is currently evaluating the impact of ASU 2025-11 on its interim financial statement disclosures.
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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 play and family entertainment company and owner of one of the most iconic brand portfolios in the world. Mattel's mission is to create innovative products and experiences that inspire fans, entertain audiences, and develop children through play, and its purpose is to empower generations to explore the wonder of childhood and reach their full potential.
Mattel is focused on the following brand-centric strategy to grow its intellectual property ("IP") driven play and family entertainment business:
•Grow its toy brands with more breakthrough innovation and adult fans and collectors, as well as evolved demand creation;
•Expand its direct-to-consumer and commercial reach through first party data, retail development, and new channels;
•Broaden content offering in film, television, and short-form content, accelerate licensing in consumer products, location-based entertainment, and publishing, and expand with new business models;
•Scale digital play through mobile games self-publishing, Mattel163 mobile games studio, licensing, and creator platforms; and
•Optimize operations and leverage artificial intelligence across its systems and supply chain.
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 partner brands and products are organized into the following categories:
Dolls—including owned brands such as Barbie, American Girl, Monster High, and Polly Pocket, and partner brands such as Disney Princess, Disney Frozen, and KPop Demon Hunters (Netflix). 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 in every girl, sparking imaginations and shaping futures through play. 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, 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.
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Vehicles—including owned brands such as Hot Wheels (including Hot Wheels Monster Trucks and Hot Wheels RC) and Matchbox, and partner brands such as Cars (Disney Pixar). Hot Wheels has continued to push the limits of performance and design since 1968, and ignites and nurtures the challenger spirit in 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.
Infant, Toddler, and Preschool—including brands such as Fisher-Price (including Little People) and Thomas & Friends, is organized into three subcategories: Fisher-Price, Preschool Entertainment, and Baby Gear and Power Wheels. The first subcategory is Fisher-Price, the power brand, which includes core Infant and Toddler product lines. 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. The second subcategory is Preschool Entertainment, which includes owned IP such as Thomas & Friends and partner entertainment brands. 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. The third subcategory is Baby Gear and Power Wheels, in which Mattel has strategically out-licensed or exited certain product lines.
Action Figures, Building Sets, Games, and Other—including owned brands such as Masters of the Universe, Mattel Brick Shop, MEGA, UNO, and partner brands such as Jurassic World (NBCUniversal), Minecraft (Microsoft), WWE, Toy Story (Disney Pixar), 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. Introduced in 2025 as a new challenger brand in Building Sets, Mattel Brick Shop is designed to introduce differentiated building experiences through innovative features, materials, and techniques intended to expand traditional building play. Within Games, UNO is the classic matching card game that is easy to learn and fast fun for everyone, while the rest of the portfolio includes beloved heritage games such as Pictionary, Skip-Bo, Phase 10, and Blokus. Games also includes digital games, including games developed and published by Mattel163, Mattel’s wholly owned mobile games studio. Other includes Plush, which contains products associated with movie releases from licensed entertainment franchises such as Minecraft, as well as Mattel-owned IP.
Recent Developments
On September 30, 2026, Mattel announced the appointment of Roger Lynch as Chairman of the Board and Chief Executive Officer. Mr. Lynch became Chairman of the Board effective October 2, 2026 and Chief Executive Officer effective October 12, 2026. Mr. Lynch has served as a member of Mattel's Board of Directors since 2018 and previously served as Mattel's Independent Lead Director. On October 19, 2026, Mattel announced the appointment of Peter Griffith as Chief Financial Officer and a member of the Board of Directors, effective October 20, 2026. On October 21, 2026, Mattel entered into a cooperation agreement with EdgePoint Investment Group Inc. and appointed Lee Matheson, a Partner at EdgePoint, to the Board of Directors.
In the third quarter of 2026, net sales increased 4% compared to the third quarter of 2025, gross margin increased to 54.8% from 50.0%, and operating income increased approximately $96 million to $476.3 million. The increase in gross margin and operating income benefited from approximately $88 million of refunds related to tariffs previously paid under the International Emergency Economic Powers Act ("IEEPA"), which Mattel received and recognized during the third quarter of 2026.
Global trade policy continues to evolve, and the ultimate impact of recent developments with respect to U.S. tariffs remains uncertain. In February 2026, the U.S. Supreme Court ruled that tariffs imposed under IEEPA on goods imported into the United States were unauthorized and subsequently a phased refund process was implemented, including the launch of Phase 3 on October 6, 2026 for certain eligible importers. The U.S. Court of International Trade’s refund order has been appealed and the IEEPA tariffs and related refund framework remain subject to ongoing legal proceedings, further guidance from U.S. Customs and Border Protection, as well as other refund process developments. Following the U.S. Supreme Court's decision on IEEPA tariffs, temporary global tariffs were imposed on imports under Section 122 of the Trade Act of 1974 ("Section 122"), which expired on July 24, 2026. These Section 122 tariffs are currently subject to legal challenge and in May 2026, the CIT issued a ruling that the Section 122 tariffs are unauthorized by the statute, although this ruling is currently stayed pending appeal. Following the expiration of the Section 122 tariffs, additional tariffs have been imposed under Section 301 of the Trade Act of 1974 and other statutory authorities. Accordingly, the ultimate availability, timing, and amount of any additional tariff refunds remain uncertain, but if recognized, could be material. As of September 30, 2026, Mattel had not recognized a receivable for additional IEEPA tariff refunds because they were not realized or realizable.
There remains substantial uncertainty regarding the duration of existing and newly announced or planned tariffs, potential changes or pauses to such tariffs, tariff levels, and whether further additional tariffs or other retaliatory actions may be imposed, modified, suspended, or invalidated, and the impacts of such actions on Mattel's business. Mattel continues to monitor and
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evaluate these developments and assess their potential impact on Mattel's business, financial condition, and results of operations.
Mattel is operating in an uncertain geopolitical and macro-economic environment with significant volatility that may impact consumer demand. To the extent the geopolitical or macro-economic environment worsens, including due to further developments in the Middle East or regulatory actions impacting global trade, 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 2025 Annual Report on Form 10-K for further discussion regarding potential impacts on Mattel's business.
Results of Operations—Third Quarter
Consolidated Results
The following table presents Mattel's consolidated results for the third quarter of 2026 and 2025:
| For the Three Months Ended | Year/Year Change | ||||||||||||||||||||||||||||||||||
| September 30, 2026 | September 30, 2025 | ||||||||||||||||||||||||||||||||||
| Amount | % of Net Sales | Amount | % of Net Sales | % | Basis Points of Net Sales | ||||||||||||||||||||||||||||||
| (In millions, except percentage and basis point information) | |||||||||||||||||||||||||||||||||||
| Net sales | $ | 1,806.7 | $ | 1,736.0 | 4 | % | |||||||||||||||||||||||||||||
| Cost of sales | 817.1 | 45.2 | % | 867.7 | 50.0 | % | -6 | % | (480) | ||||||||||||||||||||||||||
| Gross profit | 989.6 | 54.8 | % | 868.3 | 50.0 | % | 14 | % | 480 | ||||||||||||||||||||||||||
| Advertising and promotion expenses | 143.3 | 7.9 | % | 118.1 | 6.8 | % | 21 | % | 110 | ||||||||||||||||||||||||||
| Other selling and administrative expenses | 370.0 | 20.5 | % | 370.3 | 21.3 | % | — | % | (80) | ||||||||||||||||||||||||||
| Operating income | 476.3 | 26.4 | % | 379.8 | 21.9 | % | 25 | % | 450 | ||||||||||||||||||||||||||
| Interest expense | 31.9 | 1.8 | % | 29.4 | 1.7 | % | 8 | % | 10 | ||||||||||||||||||||||||||
| Interest (income) | (8.9) | -0.5 | % | (9.0) | -0.5 | % | -1 | % | — | ||||||||||||||||||||||||||
| Other non-operating expense, net | 2.9 | 1.0 | |||||||||||||||||||||||||||||||||
| Income before income taxes | 450.4 | 24.9 | % | 358.5 | 20.7 | % | 26 | % | 420 | ||||||||||||||||||||||||||
| Provision for income taxes | 96.8 | 86.9 | |||||||||||||||||||||||||||||||||
| (Income) from equity method investments | — | (6.7) | |||||||||||||||||||||||||||||||||
| Net income | $ | 353.6 | 19.6 | % | $ | 278.4 | 16.0 | % | 27 | % | 360 | ||||||||||||||||||||||||
Sales
Net sales in the third quarter of 2026 were $1.81 billion, an increase of $70.7 million, or 4%, as compared to $1.74 billion in the third quarter of 2025. The increase in net sales was due to an increase in gross billings of $87.8 million, partially offset by an increase in sales adjustments of $17.1 million.
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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 third quarter of 2026 and 2025:
| For the Three Months Ended | % Change as Reported | Currency Exchange Rate Impact | |||||||||||||||||||||||||||
| September 30, 2026 | September 30, 2025 | ||||||||||||||||||||||||||||
| (In millions, except percentage information) | |||||||||||||||||||||||||||||
| Gross Billings by Categories | |||||||||||||||||||||||||||||
| Dolls | $ | 703.2 | $ | 674.1 | 4 | % | 1 | % | |||||||||||||||||||||
| Vehicles | 679.8 | 626.2 | 9 | % | 1 | % | |||||||||||||||||||||||
| Infant, Toddler, and Preschool | 220.8 | 262.5 | -16 | % | 1 | % | |||||||||||||||||||||||
| Action Figures, Building Sets, Games, and Other | 450.8 | 404.0 | 12 | % | — | % | |||||||||||||||||||||||
| Gross Billings | $ | 2,054.6 | $ | 1,966.8 | 4 | % | 1 | % | |||||||||||||||||||||
| Supplemental Gross Billings Disclosure | |||||||||||||||||||||||||||||
| Gross Billings by Top 3 Power Brands | |||||||||||||||||||||||||||||
| Barbie | $ | 374.6 | $ | 413.9 | -9 | % | 1 | % | |||||||||||||||||||||
| Hot Wheels | 585.5 | 547.2 | 7 | % | 1 | % | |||||||||||||||||||||||
| Fisher-Price | 186.2 | 215.4 | -14 | % | 1 | % | |||||||||||||||||||||||
| Other | 908.4 | 790.2 | 15 | % | — | % | |||||||||||||||||||||||
| Gross Billings | $ | 2,054.6 | $ | 1,966.8 | 4 | % | 1 | % | |||||||||||||||||||||
Gross billings were $2.05 billion in the third quarter of 2026, an increase of $87.8 million, or 4%, as compared to $1.97 billion in the third quarter of 2025, with a favorable impact from changes in currency exchange rates of one percentage point. The increase in gross billings was primarily due to higher billings of Vehicles, Action Figures, Building Sets, Games, and Other, and Dolls, partially offset by lower billings of Infant, Toddler, and Preschool.
Dolls gross billings increased 4%, of which 13% was due to higher billings of partner brands, including the benefit from KPop Demon Hunters (Netflix), partially offset by lower billings of Barbie of 6% and lower billings of Polly Pocket of 3%.
Vehicles gross billings increased 9%, of which 6% was due to higher billings of Hot Wheels and 2% was due to higher billings of Cars (Disney Pixar).
Infant, Toddler, and Preschool gross billings decreased 16%, of which 11% was due to lower billings of Fisher-Price and 4% was due to lower billings of Preschool Entertainment.
Action Figures, Building Sets, Games, and Other gross billings increased 12%, of which 9% was due to higher billings of Games, which benefited from Mattel163's contribution, and 5% was due to higher billings of Action Figures, partially offset by lower billings of Building Sets of 3%.
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 $247.9 million in the third quarter of 2026 from $230.8 million in the third quarter of 2025. Sales adjustments as a percentage of net sales were relatively consistent at 13.7% in the third quarter of 2026, as compared to 13.3% in the third quarter of 2025.
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Cost of Sales
Cost of sales decreased by $50.6 million, or 6%, to $817.1 million in the third quarter of 2026 from $867.7 million in the third quarter of 2025. Within cost of sales, product and other costs decreased by $70.7 million, or 10%, to $617.3 million in the third quarter of 2026 from $688.0 million in the third quarter of 2025, which benefited from $88.4 million of IEEPA tariff refunds received in the third quarter of 2026. Royalty expense increased by $14.9 million, or 17%, to $103.3 million in the third quarter of 2026 from $88.5 million in the third quarter of 2025. Freight and logistics expenses increased by $5.2 million, or 6%, to $96.4 million in the third quarter of 2026, as compared to $91.3 million in the third quarter of 2025.
Gross Margin
Gross margin increased to 54.8% in the third quarter of 2026 from 50.0% in the third quarter of 2025. The increase in gross margin was primarily due to the benefit from IEEPA tariff refunds received of 490 basis points, Mattel163's contribution of 60 basis points, favorable foreign currency exchange impact of 60 basis points, and other factors totaling 150 basis points, partially offset by cost inflation of 200 basis points and higher royalty expense of 80 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 7.9% in the third quarter of 2026, as compared to 6.8% in the third quarter of 2025. The increase was primarily due to expenses associated with Mattel163, and investments in brand and marketing during the quarter.
Other Selling and Administrative Expenses
Other selling and administrative expenses were $370.0 million, or 20.5% of net sales, in the third quarter of 2026, relatively flat as compared to $370.3 million, or 21.3% of net sales, in the third quarter of 2025. The changes in other selling and administrative expenses included lower share-based compensation and incentive expense of $34.0 million, including forfeitures associated with the departure of Mattel’s former Chief Executive Officer, offset by higher investments of $20.4 million, and higher Mattel163-related and other expenses of $13.3 million.
Interest Expense
Interest expense increased to $31.9 million in the third quarter of 2026, as compared to $29.4 million in the third quarter of 2025. The slight increase was primarily due to higher average interest rates on outstanding long-term debt in the third quarter of 2026.
Interest Income
Interest income was $8.9 million in the third quarter of 2026, relatively flat as compared to $9.0 million in the third quarter of 2025.
Provision for Income Taxes
Mattel's provision for income taxes was $96.8 million in the third quarter of 2026, as compared to $86.9 million in the third quarter of 2025. The increase in provision for income taxes was primarily due to discrete tax items. During the third quarter of 2026, Mattel recognized a net discrete income tax expense of $9.9 million primarily related to the income tax expense associated with IEEPA tariff refunds, partially offset by discrete tax benefits related to previously unrecognized tax benefits. During the third quarter of 2025, Mattel recognized a net discrete income tax benefit of $2.3 million.
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 third quarter of 2026 and 2025, there were no changes to Mattel's valuation allowance.
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Segment Results
North America Segment
The following tables provide a summary of Mattel's net sales, segment income, and gross billings by categories, along with supplemental information by brand, for the North America segment for the third quarter of 2026 and 2025:
| For the Three Months Ended | % Change as Reported | Currency Exchange Rate Impact | |||||||||||||||||||||
| September 30, 2026 | September 30, 2025 | ||||||||||||||||||||||
| (In millions, except percentage information) | |||||||||||||||||||||||
| Net Sales | $ | 1,014.0 | $ | 978.1 | 4 | % | — | % | |||||||||||||||
| Segment Income | 384.7 | 315.2 | 22 | % | |||||||||||||||||||
Net sales for the North America segment in the third quarter of 2026 were $1.01 billion, an increase of $35.9 million, or 4%, as compared to $978.1 million in the third quarter of 2025. The increase in net sales was primarily due to an increase in gross billings of $45.7 million.
| For the Three Months Ended | % Change as Reported | Currency Exchange Rate Impact | |||||||||||||||||||||
| September 30, 2026 | September 30, 2025 | ||||||||||||||||||||||
| (In millions, except percentage information) | |||||||||||||||||||||||
| Gross Billings by Categories | |||||||||||||||||||||||
| Dolls | $ | 416.1 | $ | 393.8 | 6 | % | — | % | |||||||||||||||
| Vehicles | 304.8 | 276.5 | 10 | % | — | % | |||||||||||||||||
| Infant, Toddler, and Preschool | 124.4 | 157.1 | -21 | % | — | % | |||||||||||||||||
| Action Figures, Building Sets, Games, and Other | 260.3 | 232.5 | 12 | % | — | % | |||||||||||||||||
| Gross Billings | $ | 1,105.6 | $ | 1,059.9 | 4 | % | — | % | |||||||||||||||
| Supplemental Gross Billings Disclosure | |||||||||||||||||||||||
| Gross Billings by Top 3 Power Brands | |||||||||||||||||||||||
| Barbie | $ | 209.0 | $ | 234.2 | -11 | % | — | % | |||||||||||||||
| Hot Wheels | 252.2 | 235.7 | 7 | % | — | % | |||||||||||||||||
| Fisher-Price | 107.7 | 129.9 | -17 | % | — | % | |||||||||||||||||
| Other | 536.7 | 460.2 | 17 | % | — | % | |||||||||||||||||
| Gross Billings | $ | 1,105.6 | $ | 1,059.9 | 4 | % | — | % | |||||||||||||||
Gross billings for the North America segment were $1.11 billion in the third quarter of 2026, an increase of $45.7 million, or 4%, as compared to $1.06 billion in the third quarter of 2025. The increase in the North America segment gross billings was due to higher billings of Vehicles, Action Figures, Building Sets, Games, and Other, and Dolls, partially offset by lower billings of Infant, Toddler, and Preschool.
Dolls gross billings increased 6%, of which 11% was due to higher billings of partner brands, including the benefit from KPop Demon Hunters (Netflix), and 3% was due to higher billings of Monster High, partially offset by lower billings of Barbie of 6%.
Vehicles gross billings increased 10%, of which 6% was due to higher billings of Hot Wheels and 3% was due to higher billings of Cars (Disney Pixar).
Infant, Toddler, and Preschool gross billings decreased 21%, of which 14% was due to lower billings of Fisher-Price and 5% was due to lower billings of Preschool Entertainment.
Action Figures, Building Sets, Games, and Other gross billings increased 12%, of which 13% was due to higher billings of Games, which benefited from Mattel163's contribution, and 2% was due to higher billings of Action Figures, partially offset by lower billings of Building Sets of 3%.
Sales adjustments increased to $91.6 million in the third quarter of 2026 as compared to $81.8 million in the third quarter of 2025. Sales adjustments as a percentage of net sales were relatively consistent at 9.0% in the third quarter of 2026 as compared to 8.4% in the third quarter of 2025.
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Cost of sales decreased by $57.1 million, or 12%, to $430.4 million in the third quarter of 2026 from $487.5 million in the third quarter of 2025, primarily due to a decrease in product and other costs of $71.1 million, which benefited from $88.4 million of IEEPA tariff refunds received in the third quarter of 2026, partially offset by an increase in royalty expense of $10.8 million.
North America segment income increased by $69.5 million to $384.7 million in the third quarter of 2026, as compared to $315.2 million in the third quarter of 2025, primarily due to lower cost of sales of $57.1 million and higher net sales of $35.9 million, partially offset by higher advertising and promotion expenses of $14.8 million.
International Segment
The following tables provide a summary of Mattel's net sales, segment income, and gross billings by categories, along with supplemental information by brand, for the International segment for the third quarter of 2026 and 2025:
| For the Three Months Ended | % Change as Reported | Currency Exchange Rate Impact | |||||||||||||||||||||
| September 30, 2026 | September 30, 2025 | ||||||||||||||||||||||
| (In millions, except percentage information) | |||||||||||||||||||||||
| Net Sales | $ | 792.7 | $ | 757.9 | 5 | % | 2 | % | |||||||||||||||
| Segment Income | 208.8 | 208.6 | — | % | |||||||||||||||||||
Net sales for the International segment in the third quarter of 2026 were $792.7 million, an increase of $34.8 million, or 5%, as compared to $757.9 million in the third quarter of 2025. The increase in net sales was primarily due to an increase in gross billings of $42.1 million.
| For the Three Months Ended | % Change as Reported | Currency Exchange Rate Impact | |||||||||||||||||||||
| September 30, 2026 | September 30, 2025 | ||||||||||||||||||||||
| (In millions, except percentage information) | |||||||||||||||||||||||
| Gross Billings by Categories | |||||||||||||||||||||||
| Dolls | $ | 287.1 | $ | 280.2 | 2 | % | 2 | % | |||||||||||||||
| Vehicles | 375.0 | 349.8 | 7 | % | 2 | % | |||||||||||||||||
| Infant, Toddler, and Preschool | 96.4 | 105.3 | -9 | % | 3 | % | |||||||||||||||||
| Action Figures, Building Sets, Games, and Other | 190.5 | 171.6 | 11 | % | 1 | % | |||||||||||||||||
| Gross Billings | $ | 949.0 | $ | 906.9 | 5 | % | 2 | % | |||||||||||||||
| Supplemental Gross Billings Disclosure | |||||||||||||||||||||||
| Gross Billings by Top 3 Power Brands | |||||||||||||||||||||||
| Barbie | $ | 165.6 | $ | 179.8 | -8 | % | 2 | % | |||||||||||||||
| Hot Wheels | 333.3 | 311.6 | 7 | % | 2 | % | |||||||||||||||||
| Fisher-Price | 78.4 | 85.6 | -8 | % | 3 | % | |||||||||||||||||
| Other | 371.7 | 330.0 | 13 | % | 1 | % | |||||||||||||||||
| Gross Billings | $ | 949.0 | $ | 906.9 | 5 | % | 2 | % | |||||||||||||||
Gross billings for the International segment were $949.0 million in the third quarter of 2026, an increase of $42.1 million, or 5%, as compared to $906.9 million in the third quarter of 2025, with a favorable impact from changes in currency exchange rates of two percentage points. The increase in the International segment gross billings was due to higher billings of Vehicles, Action Figures, Building Sets, Games, and Other, and Dolls, partially offset by lower billings of Infant, Toddler, and Preschool.
Dolls gross billings increased 2%, of which 16% was due to higher billings of partner brands, including benefits from KPop Demon Hunters (Netflix), partially offset by lower billings of Barbie of 5%, lower billings of Polly Pocket of 5%, and lower billings of Monster High of 3%.
Vehicles gross billings increased 7%, of which 6% was due to higher billings of Hot Wheels.
Infant, Toddler, and Preschool gross billings decreased 9%, of which 7% was due to lower billings of Fisher-Price.
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Action Figures, Building Sets, Games, and Other gross billings increased 11%, of which 10% was due to higher billings of Action Figures, and 5% was due to higher billings of Games, which benefited from Mattel163's contribution, partially offset by lower billings of Building Sets of 3%.
Sales adjustments increased to $156.3 million in the third quarter of 2026 from $149.0 million in the third quarter of 2025. Sales adjustments as a percentage of net sales remained consistent at 19.7% in the third quarter of 2026 and 2025.
Cost of sales increased by $9.3 million, or 2%, to $385.1 million in the third quarter of 2026 from $375.8 million in the third quarter of 2025, primarily due to an increase in royalty expense of $4.1 million and product and other costs of $3.3 million.
International segment income was $208.8 million in the third quarter of 2026, relatively flat compared to $208.6 million in the third quarter of 2025, due to higher net sales of $34.8 million, partially offset by higher other selling and administrative expenses of $14.9 million, higher advertising and promotion expenses of $10.3 million, and higher cost of sales of $9.3 million.
Results of Operations—First Nine Months
Consolidated Results
The following table presents Mattel's consolidated results for the first nine months of 2026 and 2025:
| For the Nine Months Ended | Year/Year Change | ||||||||||||||||||||||||||||||||||
| September 30, 2026 | September 30, 2025 | ||||||||||||||||||||||||||||||||||
| Amount | % of Net Sales | Amount | % of Net Sales | % | Basis Points of Net Sales | ||||||||||||||||||||||||||||||
| (In millions, except percentage and basis point information) | |||||||||||||||||||||||||||||||||||
| Net sales | $ | 3,794.2 | $ | 3,581.2 | 6 | % | |||||||||||||||||||||||||||||
| Cost of sales | 1,875.7 | 49.4 | % | 1,785.9 | 49.9 | % | 5 | % | (50) | ||||||||||||||||||||||||||
| Gross profit | 1,918.5 | 50.6 | % | 1,795.3 | 50.1 | % | 7 | % | 50 | ||||||||||||||||||||||||||
| Advertising and promotion expenses | 360.5 | 9.5 | % | 267.5 | 7.5 | % | 35 | % | 200 | ||||||||||||||||||||||||||
| Other selling and administrative expenses | 1,173.5 | 30.9 | % | 1,122.5 | 31.3 | % | 5 | % | (40) | ||||||||||||||||||||||||||
| Operating income | 384.5 | 10.1 | % | 405.4 | 11.3 | % | -5 | % | (120) | ||||||||||||||||||||||||||
| Interest expense | 94.7 | 2.5 | % | 88.0 | 2.5 | % | 8 | % | — | ||||||||||||||||||||||||||
| Interest (income) | (26.6) | -0.7 | % | (37.3) | -1.0 | % | -29 | % | 30 | ||||||||||||||||||||||||||
| Other non-operating (income) expense, net | (141.1) | 12.6 | |||||||||||||||||||||||||||||||||
| Income before income taxes | 457.4 | 12.1 | % | 342.1 | 9.6 | % | 34 | % | 250 | ||||||||||||||||||||||||||
| Provision for income taxes | 64.6 | 72.5 | |||||||||||||||||||||||||||||||||
| (Income) from equity method investments | (3.6) | (21.8) | |||||||||||||||||||||||||||||||||
| Net income | $ | 396.4 | 10.4 | % | $ | 291.4 | 8.1 | % | 36 | % | 230 | ||||||||||||||||||||||||
Sales
Net sales in the first nine months of 2026 were $3.79 billion, an increase of $213.0 million, or 6%, as compared to $3.58 billion in the first nine months of 2025. The increase in net sales was due to an increase in gross billings of $252.0 million, partially offset by an increase in sales adjustments of $38.9 million.
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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 first nine months of 2026 and 2025:
| For the Nine Months Ended | % Change as Reported | Currency Exchange Rate Impact | |||||||||||||||||||||
| September 30, 2026 | September 30, 2025 | ||||||||||||||||||||||
| (In millions, except percentage information) | |||||||||||||||||||||||
| Gross Billings by Categories | |||||||||||||||||||||||
| Dolls | $ | 1,292.7 | $ | 1,305.8 | -1 | % | 1 | % | |||||||||||||||
| Vehicles | 1,504.6 | 1,342.2 | 12 | % | 2 | % | |||||||||||||||||
| Infant, Toddler, and Preschool | 454.8 | 532.3 | -15 | % | 2 | % | |||||||||||||||||
| Action Figures, Building Sets, Games, and Other | 1,041.3 | 861.2 | 21 | % | 1 | % | |||||||||||||||||
| Gross Billings | $ | 4,293.4 | $ | 4,041.4 | 6 | % | 2 | % | |||||||||||||||
| Supplemental Gross Billings Disclosure | |||||||||||||||||||||||
| Gross Billings by Top 3 Power Brands | |||||||||||||||||||||||
| Barbie | $ | 689.8 | $ | 788.3 | -13 | % | 2 | % | |||||||||||||||
| Hot Wheels | 1,308.6 | 1,173.3 | 12 | % | 2 | % | |||||||||||||||||
| Fisher-Price | 365.6 | 413.4 | -12 | % | 2 | % | |||||||||||||||||
| Other | 1,929.4 | 1,666.3 | 16 | % | 1 | % | |||||||||||||||||
| Gross Billings | $ | 4,293.4 | $ | 4,041.4 | 6 | % | 2 | % | |||||||||||||||
Gross billings were $4.29 billion in the first nine months of 2026, an increase of $252.0 million, or 6%, as compared to $4.04 billion in the first nine months of 2025, with a favorable impact from changes in currency exchange rates of two percentage points. The increase in gross billings was primarily due to higher billings of Action Figures, Building Sets, Games, and Other and Vehicles, partially offset by lower billings of Infant, Toddler, and Preschool, and Dolls.
Dolls gross billings decreased 1%, of which 8% was due to lower billings of Barbie, partially offset by higher billings of partner brands of 7%, including the benefit from KPop Demon Hunters (Netflix).
Vehicles gross billings increased 12%, of which 10% was due to higher billings of Hot Wheels and 2% was due to higher billings of Cars (Disney Pixar).
Infant, Toddler, and Preschool gross billings decreased 15%, of which 9% was due to lower billings of Fisher-Price, 4% was due to lower billings of Preschool Entertainment, and 2% was due to lower billings of Baby Gear and Power Wheels, due to the continued strategic exit from certain product lines in Baby Gear and Power Wheels.
Action Figures, Building Sets, Games, and Other gross billings increased 21%, of which 14% was due to higher billings of Games, which benefited from Mattel163's contribution, and 8% was due to higher billings of Action Figures.
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 $499.2 million in the first nine months of 2026 from $460.3 million in the first nine months of 2025. Sales adjustments as a percentage of net sales were relatively consistent at 13.2% in the first nine months of 2026, as compared to 12.9% in the first nine months of 2025.
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Cost of Sales
Cost of sales increased by $89.8 million, or 5%, to $1.88 billion in the first nine months of 2026 from $1.79 billion in the first nine months of 2025. Within cost of sales, royalty expense increased by $38.4 million, or 21%, to $220.5 million in the first nine months of 2026 from $182.2 million in the first nine months of 2025. Product and other costs increased by $31.8 million, or 2%, to $1.41 billion in the first nine months of 2026, as compared to $1.38 billion in the first nine months of 2025. The increase in product and other costs was partially offset by the benefit from $90.1 million of IEEPA tariff refunds received in the first nine months of 2026. Freight and logistics expenses increased by $19.6 million, or 9%, to $248.1 million in the first nine months of 2026 from $228.5 million in the first nine months of 2025.
Gross Margin
Gross margin increased to 50.6% in the first nine months of 2026 from 50.1% in the first nine months of 2025. The increase in gross margin was primarily due to the benefit from IEEPA tariff refunds received of 240 basis points, Mattel163's contribution of 70 basis points, and the net benefit from other factors of 90 basis points, including mitigating actions to offset tariffs, and realized savings from the OPG program. The increase was partially offset by cost inflation of 150 basis points, gross incremental tariff costs of 110 basis points, and higher royalty expense of 90 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 9.5% in the first nine months of 2026 from 7.5% in the first nine months of 2025. The increase was primarily due to investments in brand, marketing, and promotional activities for theatrical releases, and expenses associated with Mattel163.
Other Selling and Administrative Expenses
Other selling and administrative expenses were $1.17 billion, or 30.9% of net sales, in the first nine months of 2026, an increase of $51.0 million, as compared to $1.12 billion, or 31.3% of net sales, in the first nine months of 2025. The increase in other selling and administrative expenses was primarily due to higher investments of $56.5 million, higher employee wages of $15.8 million, higher expenses associated with Mattel163, including acquisition-related expenses, and other expenses of $70.2 million. The increase was partially offset by lower share-based compensation and incentive expense of $41.2 million, including forfeitures associated with the departure of Mattel’s former Chief Executive Officer, additional realized savings from the OPG program of $31.7 million, and lower expenses related to inclined sleeper product recalls and related litigation of $18.6 million.
Interest Expense
Interest expense was $94.7 million in the first nine months of 2026, as compared to $88.0 million in the first nine months of 2025. The increase was primarily due to higher average interest rates on outstanding long-term debt in the first nine months of 2026.
Interest Income
Interest income was $26.6 million in the first nine months of 2026, as compared to $37.3 million in the first nine months of 2025. The decrease was primarily due to lower average invested cash balances in the first nine months of 2026.
Other Non-Operating (Income)/Expense, Net
Other non-operating income increased by $153.6 million to $141.1 million in the first nine months of 2026 from an expense of $12.6 million in the first nine months of 2025, primarily due to the gain recognized on Mattel's previously held equity interest in Mattel163. On March 2, 2026, Mattel acquired the remaining 50% equity interest in Mattel163. Prior to the acquisition of the remaining 50% equity interest in Mattel163, Mattel accounted for its investment under the equity method. Upon obtaining control, Mattel remeasured its previously held 50% equity interest to its estimated fair value as of the Acquisition Date, resulting in a gain of $147.9 million recognized in the first nine months of 2026.
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Provision for Income Taxes
Mattel's provision for income taxes was $64.6 million for the first nine months of 2026, as compared to $72.5 million for the first nine months of 2025. The decrease in the provision for income taxes was primarily due to lower operating income before the benefit from IEEPA tariff refunds, partially offset by higher net discrete income tax expense. During the first nine months of 2026, Mattel recognized a net discrete tax expense of $10.7 million, primarily related to the income tax expense on IEEPA tariff refunds and interest expense accrued on previously unrecognized tax benefits, partially offset by discrete tax benefits related to previously unrecognized tax benefits. During the first nine months of 2025, Mattel recognized a net discrete income tax benefit of $12.6 million, primarily related to a change in its indefinite reinvestment assertion relating to certain foreign subsidiary earnings.
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 nine months of 2026 and 2025, there were no changes to Mattel's valuation allowance.
Segment Results
North America Segment
The following tables provide a summary of Mattel's net sales, segment income, and gross billings by categories, along with supplemental information by brand, for the North America segment for the first nine months of 2026 and 2025:
| For the Nine Months Ended | % Change as Reported | Currency Exchange Rate Impact | |||||||||||||||||||||
| September 30, 2026 | September 30, 2025 | ||||||||||||||||||||||
| (In millions, except percentage information) | |||||||||||||||||||||||
| Net Sales | $ | 2,063.5 | $ | 1,980.3 | 4 | % | — | % | |||||||||||||||
| Segment Income | 511.2 | 492.1 | 4 | % | |||||||||||||||||||
Net sales for the North America segment in the first nine months of 2026 were $2.06 billion, an increase of $83.2 million, or 4%, as compared to $1.98 billion in the first nine months of 2025. The increase in net sales was primarily due to an increase in gross billings of $94.0 million.
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| For the Nine Months Ended | % Change as Reported | Currency Exchange Rate Impact | |||||||||||||||||||||
| September 30, 2026 | September 30, 2025 | ||||||||||||||||||||||
| (In millions, except percentage information) | |||||||||||||||||||||||
| Gross Billings by Categories | |||||||||||||||||||||||
| Dolls | $ | 744.7 | $ | 734.8 | 1 | % | — | % | |||||||||||||||
| Vehicles | 651.8 | 600.8 | 8 | % | — | % | |||||||||||||||||
| Infant, Toddler, and Preschool | 249.1 | 307.1 | -19 | % | — | % | |||||||||||||||||
| Action Figures, Building Sets, Games, and Other | 581.8 | 490.7 | 19 | % | — | % | |||||||||||||||||
| Gross Billings | $ | 2,227.4 | $ | 2,133.4 | 4 | % | — | % | |||||||||||||||
| Supplemental Gross Billings Disclosure | |||||||||||||||||||||||
| Gross Billings by Top 3 Power Brands | |||||||||||||||||||||||
| Barbie | $ | 360.9 | $ | 418.3 | -14 | % | — | % | |||||||||||||||
| Hot Wheels | 546.2 | 508.7 | 7 | % | — | % | |||||||||||||||||
| Fisher-Price | 206.6 | 240.3 | -14 | % | — | % | |||||||||||||||||
| Other | 1,113.7 | 966.1 | 15 | % | — | % | |||||||||||||||||
| Gross Billings | $ | 2,227.4 | $ | 2,133.4 | 4 | % | — | % | |||||||||||||||
Gross billings for the North America segment were $2.23 billion in the first nine months of 2026, an increase of $94.0 million, or 4%, as compared to $2.13 billion in the first nine months of 2025. The increase in the North America segment gross billings was primarily due to higher billings of Action Figures, Building Sets, Games, and Other, Vehicles, and Dolls, partially offset by lower billings of Infant, Toddler, and Preschool.
Dolls gross billings increased 1%, of which 8% was due to higher billings of partner brands, including the benefit from KPop Demon Hunters (Netflix), and 2% was due to higher billings of Monster High, partially offset by lower billings of Barbie of 8%.
Vehicles gross billings increased 8%, of which 6% was due to higher billings of Hot Wheels and 2% was due to higher billings of Cars (Disney Pixar).
Infant, Toddler, and Preschool gross billings decreased 19%, of which 11% was due to lower billings of Fisher-Price, 5% was due to lower billings of Preschool Entertainment, and 3% was due to lower billings of Baby Gear and Power Wheels, due to the continued strategic exit from certain product lines in Baby Gear and Power Wheels.
Action Figures, Building Sets, Games, and Other gross billings increased 19%, of which 16% was due to higher billings of Games, which benefited from Mattel163's contribution, and 4% was due to higher billings of Action Figures.
Sales adjustments increased to $163.9 million in the first nine months of 2026 from $153.1 million in the first nine months of 2025. Sales adjustments as a percentage of net sales were relatively consistent at 7.9% for the first nine months of 2026, as compared to 7.7% for the first nine months of 2025.
Cost of sales decreased by $7.9 million, or 1%, to $1.00 billion in the first nine months of 2026 from $1.01 billion in the first nine months of 2025, primarily due to a decrease in product and other costs of $34.3 million, which includes the benefit of IEEPA tariff refunds received of $88.4 million, partially offset by an increase in royalty expense of $19.4 million.
North America segment income increased by $19.1 million to $511.2 million in the first nine months of 2026, as compared to $492.1 million in the first nine months of 2025, primarily due to higher net sales of $83.2 million, partially offset by higher advertising and promotion expenses of $47.3 million and higher other selling and administrative expenses of $24.7 million.
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International Segment
The following tables provide a summary of Mattel's net sales, segment income, and gross billings by categories, along with supplemental information by brand, for the International segment for the first nine months of 2026 and 2025:
| For the Nine Months Ended | % Change as Reported | Currency Exchange Rate Impact | |||||||||||||||||||||
| September 30, 2026 | September 30, 2025 | ||||||||||||||||||||||
| (In millions, except percentage information) | |||||||||||||||||||||||
| Net Sales | $ | 1,730.7 | $ | 1,600.9 | 8 | % | 4 | % | |||||||||||||||
| Segment Income | 310.6 | 346.9 | -10 | % | |||||||||||||||||||
Net sales for the International segment in the first nine months of 2026 were $1.73 billion, an increase of $129.8 million, or 8%, as compared to $1.60 billion in the first nine months of 2025. The increase in net sales was due to an increase in gross billings of $158.0 million, partially offset by an increase in sales adjustments of $28.2 million.
| For the Nine Months Ended | % Change as Reported | Currency Exchange Rate Impact | |||||||||||||||||||||
| September 30, 2026 | September 30, 2025 | ||||||||||||||||||||||
| (In millions, except percentage information) | |||||||||||||||||||||||
| Gross Billings by Categories | |||||||||||||||||||||||
| Dolls | $ | 548.0 | $ | 571.0 | -4 | % | 3 | % | |||||||||||||||
| Vehicles | 852.7 | 741.3 | 15 | % | 4 | % | |||||||||||||||||
| Infant, Toddler, and Preschool | 205.7 | 225.2 | -9 | % | 4 | % | |||||||||||||||||
| Action Figures, Building Sets, Games, and Other | 459.6 | 370.4 | 24 | % | 3 | % | |||||||||||||||||
| Gross Billings | $ | 2,066.0 | $ | 1,908.0 | 8 | % | 4 | % | |||||||||||||||
| Supplemental Gross Billings Disclosure | |||||||||||||||||||||||
| Gross Billings by Top 3 Power Brands | |||||||||||||||||||||||
| Barbie | $ | 328.9 | $ | 370.0 | -11 | % | 3 | % | |||||||||||||||
| Hot Wheels | 762.5 | 664.6 | 15 | % | 4 | % | |||||||||||||||||
| Fisher-Price | 158.9 | 173.2 | -8 | % | 4 | % | |||||||||||||||||
| Other | 815.7 | 700.3 | 16 | % | 3 | % | |||||||||||||||||
| Gross Billings | $ | 2,066.0 | $ | 1,908.0 | 8 | % | 4 | % | |||||||||||||||
Gross billings for the International segment were $2.07 billion in the first nine months of 2026, an increase of $158.0 million, or 8%, as compared to $1.91 billion in the first nine months of 2025, with a favorable impact from changes in currency exchange rates of four percentage points. The increase in gross billings was due to higher billings of Vehicles, Action Figures, Building Sets, Games, and Other, partially offset by lower billings of Dolls and Infant, Toddler, and Preschool.
Dolls gross billings decreased 4%, of which 8% was due to lower billings of Barbie, and 4% was due to lower billings of Polly Pocket, partially offset by higher billings of partner brands of 8%, including the benefit of KPop Demon Hunters (Netflix).
Vehicles gross billings increased 15%, of which 13% was due to higher billings of Hot Wheels and 2% was due to higher billings of Cars (Disney Pixar).
Infant, Toddler, and Preschool gross billings decreased 9%, of which 6% was due to lower billings of Fisher-Price, and 2% was due to lower billings of Preschool Entertainment.
Action Figures, Building Sets, Games, and Other gross billings increased 24%, of which 14% was due to higher billings of Action Figures and 11% was due to higher billings of Games, which benefited from Mattel163's contribution.
Sales adjustments increased to $335.3 million in the first nine months of 2026 from $307.1 million in the first nine months of 2025. Sales adjustments as a percentage of net sales were relatively consistent at 19.4% for the first nine months of 2026, as compared to 19.2% for the first nine months of 2025.
Cost of sales increased by $65.9 million, or 8%, to $862.3 million in the first nine months of 2026 from $796.4 million in the first nine months of 2025 due to an increase in product and other costs of $34.9 million, an increase in royalty expense of $18.9 million, and an increase in freight and logistics expenses of $12.1 million.
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International segment income decreased by $36.3 million to $310.6 million in the first nine months of 2026, as compared to $346.9 million in the first nine months of 2025, primarily due to higher cost of sales of $65.9 million, higher other selling and administrative expenses of $54.5 million, and higher advertising and promotion expenses of $45.7 million, partially offset by higher net sales of $129.8 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 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. The targeted annual gross cost savings from actions associated with the OPG program were increased from $200 million to $225 million in the fourth quarter of 2025. Annual gross cost savings from the OPG program are now expected at or above the $225 million target, and the program is expected to be completed by the end of 2026. Of the expected annual gross cost savings, approximately 55% is expected to benefit cost of sales and 45% is expected to benefit other selling and administrative expenses. Total cash expenditures under the OPG program are expected to be up to approximately $140 million, and total non-cash charges are expected to be approximately $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 | $120 to $125 million | ||||
| Other restructuring costs | Approximately $10 million | ||||
| Non-cash charges | Approximately $5 million | ||||
| Total estimated severance and other restructuring costs | $135 to $140 million | ||||
| Investments | Up to $5 million | ||||
| Total estimated actions | $135 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 Nine Months Ended | ||||||||||||||||||||||
| September 30, 2026 | September 30, 2025 | September 30, 2026 | September 30, 2025 | ||||||||||||||||||||
| (In millions) | |||||||||||||||||||||||
| Cost of sales (a) | $ | 0.2 | $ | 2.4 | $ | 1.0 | $ | 6.1 | |||||||||||||||
| Other selling and administrative expenses (b) | 2.1 | 0.3 | 19.7 | 19.8 | |||||||||||||||||||
| $ | 2.3 | $ | 2.7 | $ | 20.7 | $ | 25.9 | ||||||||||||||||
(a)Severance and other restructuring costs recorded within cost of sales in the consolidated statements of operations are included in segment income in "Note 22 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 unallocated corporate and other operating expenses in "Note 22 to the Consolidated Financial Statements—Segment Information."
As of September 30, 2026, in connection with the OPG program, Mattel recorded cumulative severance and other restructuring charges of approximately $136 million, which included approximately $5 million of non-cash charges. Mattel realized cumulative cost savings (before severance, restructuring costs, and cost inflation) of approximately $225 million, which represents approximately 55% benefit to cost of sales, and approximately 45% benefit to other selling and administrative expenses, as of September 30, 2026, in connection with the OPG program.
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Liquidity and Capital Resources
Mattel's primary sources of liquidity are its domestic and foreign cash and equivalents balances, cash flows from operating activities, short-term borrowing facilities, including its $1.40 billion in aggregate principal amount of senior unsecured revolving credit facilities (the "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 $541.4 million in cash and equivalents at September 30, 2026, $380.4 million was held by foreign subsidiaries, including $71.3 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 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, 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 September 30, 2026, Mattel had no outstanding borrowings under the Credit Facility and approximately $13 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 $113.5 million in the first nine months of 2026, as compared to $203.3 million in the first nine months of 2025. The decrease in cash flows used for operating activities was primarily due to a decrease in cash used for working capital of $186.4 million, partially offset by a decrease in net income, excluding the impact of non-cash items.
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Cash flows used for investing activities were $249.9 million in the first nine months of 2026, as compared to $97.5 million in the first nine months of 2025. The increase in cash flows used for investing activities was primarily due to $74.8 million of cash paid for the remaining 50% equity interest in Mattel163, net of cash acquired, and an increase in capital expenditures of $61.4 million.
Cash flows used for financing activities were $333.8 million in the first nine months of 2026, as compared to $426.3 million in the first nine months of 2025. The decrease in cash flows used for financing activities was primarily due to $308.4 million of cash paid for share repurchases in the first nine months of 2026 as compared to $412.5 million in the first nine months of 2025.
Seasonal Financing
See Part I, Item 1 "Financial Statements—Note 9 to the Consolidated Financial Statements—Seasonal Financing" of this Quarterly Report on Form 10-Q.
Financial Position
Mattel's cash and equivalents decreased by $701.5 million to $541.4 million at September 30, 2026 from $1.24 billion at December 31, 2025. The decrease during the nine months ended September 30, 2026 was primarily due to cash paid for share repurchases of $308.4 million, capital expenditures of $186.3 million, cash flows used for operating activities of $113.5 million, and $74.8 million of cash paid for the remaining 50% equity interest in Mattel163, net of cash acquired. Mattel's cash and equivalents decreased by $150.5 million to $541.4 million at September 30, 2026 from $691.9 million at September 30, 2025. The decrease during the trailing twelve months was primarily due to cash paid for share repurchases of $495.9 million, capital expenditures of $243.4 million, and $74.8 million of cash paid for the remaining 50% equity interest in Mattel163, net of cash acquired, partially offset by cash flows provided by operating activities of $683.0 million.
Accounts receivable increased by $302.5 million to $1.40 billion at September 30, 2026 from $1.10 billion at December 31, 2025, primarily due to the seasonality of Mattel's business. Accounts receivable were $1.40 billion at September 30, 2026, relatively flat as compared to $1.39 billion at September 30, 2025, as a result of higher sales offset by the timing of collections.
Inventories increased by $264.8 million to $828.0 million at September 30, 2026 from $563.1 million at December 31, 2025, primarily due to seasonal inventory build-up. Inventories were $828.0 million at September 30, 2026, relatively flat as compared to $826.6 million at September 30, 2025.
Prepaid expenses and other current assets were $218.6 million at September 30, 2026, relatively flat as compared to $227.1 million at December 31, 2025. Prepaid expenses and other current assets decreased by $28.3 million to $218.6 million at September 30, 2026 from $246.9 million at September 30, 2025, primarily due to decreases in prepaid royalties of $25.6 million.
Accounts payable and accrued liabilities increased by $26.4 million to $1.45 billion at September 30, 2026 from $1.43 billion at December 31, 2025, primarily due to an increase in deferred income of $49.7 million, an increase in accrued wages of $35.3 million, an increase in accrued interest of $29.9 million, and an increase in accrued royalties of $15.1 million. The increase was partially offset by a decrease in other accrued liabilities of $47.4 million, a decrease in accounts payable of $37.9 million, and a decrease in accrued incentive compensation of $36.9 million. Accounts payable and accrued liabilities increased by $132.1 million to $1.45 billion at September 30, 2026 from $1.32 billion at September 30, 2025, primarily due to an increase in deferred income of $53.7 million, an increase in accrued wages of $32.5 million, an increase in accounts payable of $24.7 million, and an increase in accrued advertising of $21.9 million.
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A summary of Mattel's capitalization is as follows:
| September 30, 2026 | September 30, 2025 | December 31, 2025 | |||||||||||||||||||||||||||||||||
| (In millions, except percentage information) | |||||||||||||||||||||||||||||||||||
| Cash and equivalents | $ | 541.4 | $ | 691.9 | $ | 1,242.9 | |||||||||||||||||||||||||||||
| 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 | — | ||||||||||||||||||||||||||||||||
| 2021 Senior Notes due April 2029 | 600.0 | 600.0 | 600.0 | ||||||||||||||||||||||||||||||||
| 2025 Senior Notes due November 2030 | 600.0 | — | 600.0 | ||||||||||||||||||||||||||||||||
| Debt issuance costs and debt discount | (15.0) | (12.4) | (18.3) | ||||||||||||||||||||||||||||||||
| Total debt | 2,335.0 | 50 | % | 2,337.6 | 51 | % | 2,331.7 | 51 | % | ||||||||||||||||||||||||||
| Stockholders' equity | 2,340.6 | 50 | 2,261.2 | 49 | 2,233.0 | 49 | |||||||||||||||||||||||||||||
| Total capitalization (total debt plus stockholders' equity) | $ | 4,675.6 | 100 | % | $ | 4,598.8 | 100 | % | $ | 4,564.7 | 100 | % | |||||||||||||||||||||||
Total debt was $2.33 billion at both September 30, 2026 and December 31, 2025, and $2.34 billion at September 30, 2025. During November 2025, Mattel issued $600.0 million of 2025 Senior Notes due November 2030 and used the net proceeds plus cash on hand to repay $600.0 million of 2021 Senior Notes due April 2026.
Stockholders' equity increased by $107.6 million to $2.34 billion at September 30, 2026 from $2.23 billion at December 31, 2025, primarily due to net income of $396.4 million, partially offset by share repurchases of $311.0 million during the nine months ended September 30, 2026. Stockholders' equity increased by $79.4 million to $2.34 billion at September 30, 2026 from $2.26 billion at September 30, 2025, primarily due to net income of $502.6 million, other comprehensive income of $42.0 million, and the net effect of share-based compensation and the related issuance of treasury stock of $33.6 million, partially offset by share repurchases of $500.2 million during that twelve-month period.
Litigation
See Part I, Item 1 "Financial Statements—Note 21 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 2025 Annual Report on Form 10-K and did not materially change during the first nine months of 2026.
New Accounting Pronouncements
See Part I, Item 1 "Financial Statements—Note 23 to the Consolidated Financial Statements—New Accounting Pronouncements" of this Quarterly Report on Form 10-Q.
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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 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 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 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
Foreign currency exchange rate fluctuations impact Mattel's results of operations and cash flows. The Hong Kong dollar and Euro were the primary currencies that resulted in foreign currency transaction exposure for Mattel during the first nine months of 2026. Mattel seeks to mitigate its exposure to 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.
Foreign currency transaction gains or losses are recorded in the consolidated statements of operations within operating income or other non-operating expense (income), net based on the nature of the underlying transaction during the period in which exchange rates change. Gains or losses on foreign currency forward exchange contracts are recognized in the consolidated statements of operations in a manner intended to offset the foreign currency transaction gains and losses associated with the related exposure.
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.
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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 nine months ended September 30, 2026 were related to the weakening of the Euro, Indonesian rupiah, and British pound sterling against the U.S. dollar, partially offset by the strengthening of the Chinese yuan against the U.S. dollar.
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 third quarter 2026 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 September 30, 2026, 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, Roger Lynch, Mattel's principal executive officer, and Peter Griffith, Mattel's principal financial officer, concluded that these disclosure controls and procedures were effective to provide reasonable assurance as of September 30, 2026.
Changes in Internal Control Over Financial Reporting
There were no changes in Mattel's internal control over financial reporting during the quarter ended September 30, 2026 that materially affected, or are reasonably likely to materially affect, Mattel's internal control over financial reporting.
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PART II—OTHER INFORMATION
Item 1. Legal Proceedings.
The content of Part I, Item 1 "Financial Statements—Note 21 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.
There have been no material changes to the risk factors disclosed under Part I, Item 1A "Risk Factors" in the 2025 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 third quarter of 2026, 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 third quarter of 2026:
| 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) | |||||||||||||||||||
| July 1-31 | 6,914 | $ | 14.71 | — | $ | 1,200.0 | |||||||||||||||||
| August 1-31 | 561,925 | 15.21 | 552,812 | 1,191.6 | |||||||||||||||||||
| September 1-30 | 28,705 | 12.84 | — | 1,191.6 | |||||||||||||||||||
| Total | 597,544 | $ | 15.09 | 552,812 | $ | 1,191.6 | |||||||||||||||||
____________________________________
(a)The total number of shares purchased includes 44,732 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 9, 2026, Mattel's Board of Directors authorized a $1.50 billion share repurchase program. As of September 30, 2026, Mattel had a remaining authorization of $1.19 billion under the program. Repurchases under the 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)None
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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 Roberto Stanichi, dated July 29, 2026 | 8-K | 001-05647 | 10.1 | July 31, 2026 | |||||||||||||||||||||||||||
10.2+ | Letter Agreement between Mattel, Inc. and Roger Lynch, dated September 29, 2026 | 8-K | 001-05647 | 10.1 | September 30, 2026 | |||||||||||||||||||||||||||
10.3+ | Amendment, dated October 12, 2026 to the Letter Agreement between Mattel, Inc. and Roger Lynch | 8-K | 001-05647 | 10.1 | October 14, 2026 | |||||||||||||||||||||||||||
10.4+* | Mattel, Inc. Deferred Compensation and PIP Excess Plan (Post-2004) | |||||||||||||||||||||||||||||||
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. | ||||
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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: November 5, 2026
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