It was a mixed year, but Mattel closed out the fourth quarter of 2025 with net sales of $1.77 billion, up 7% as reported and 5% in constant currency, fueled by gains in both North America and International. The topline moved in the right direction, but it wasn’t a free ride: Gross Margin fell to 45.9% from 50.7% a year ago as higher discounts, inflation, foreign exchange pressure, and a lag between mitigation steps and tariff cost recognition squeezed results.
Reported Operating Income for the quarter was $141 million, down $17 million, while Adjusted Operating Income was $160 million, down $1 million, reflecting the margin pressure partially offset by lower Adjusted SG&A.
“We achieved strong topline growth in the fourth quarter, and consumer demand was positive in every region for both the quarter and full year, but December gross billings in the U.S. ended up growing less than expected,” said Ynon Kreiz, Chairman and CEO of Mattel “Our international business was positive for the year and we gained market share in key categories globally.”
On the product side, Mattel’s mix did the talking. Vehicles spiked 20% worldwide in the quarter, driven primarily by Hot Wheels. Action Figures, Building Sets, Games, and Other jumped 16%, with growth largely tied to theatrical releases. Dolls edged up 2% (with Barbie up 2% as reported), while Infant, Toddler, and Preschool slid 8% as reported amid declines in Baby Gear, Power Wheels, and Preschool Entertainment.
Full-year 2025 landed with a different tone. Net sales were $5.35 billion, down 1% as reported and in constant currency, as a 5% drop in North America outweighed a 6% increase internationally. Gross Margin fell to 48.7% from 50.8%, and Reported Operating Income declined to $546 million (Adjusted Operating Income: $620 million), driven by lower gross profit and higher advertising spend.
Cash Flow from operating activities was $593 million for the year, down $207 million, as working capital usage increased and net income declined. Vehicles finished the year up 11%, while Dolls fell 7% and Infant, Toddler, and Preschool dropped 17%, underscoring a portfolio that’s performing best where speed, screens, and collectibility meet.
That said, there is much to look forward to for Mattel, fresh off its “Manufacturer of the Year” win in The Toy Book’s 2026 Pulse of Play Awards.
The company has some big moments on deck this year, including the Masters of the Universe and Matchbox movies, products tied to Toy Story 5, and the 40th anniversary of American Girl. There’s also the return of the DC license to Mattel’s portfolio, and news that the legendary Teenage Mutant Ninja Turtles will join Mattel in 2027 under a new deal with Paramount. Additionally, its full acquisition of Mattel163 demonstrates that the company seeks control over its digital destiny, as 20 million players engage with games inspired by Mattel IP.
“2026 will be an important year for Mattel as we implement our new brand-centric strategy to grow our IP-driven play and family entertainment business. We expect growth to be led by innovation in toys, major partnerships with leading IP owners, and an inflection in entertainment, with two movie releases and an expansion of digital games, amplified by the full acquisition of Mattel163 mobile games studio,” Kreiz added. “We are making strategic investments that will impact the bottom line this year but are intended to accelerate growth in top and bottom lines in 2027 and beyond.”
