The team behind Barbie, Barney, and Masters of the Universe had a decent first quarter, but the future is unclear.
Mattel kicked off 2025 with solid momentum, reporting Q1 net sales of $827 million — a 2% uptick as reported, and 4% in constant currency. The gain was driven by strong performances in both North America and international markets, with Hot Wheels and a growing stable of action figures leading the charge.
Gross margin climbed to 49.4%, boosted by cleaner inventory and savings from the toymaker’s ongoing “Optimizing for Profitable Growth” program. But it wasn’t all green lights. The company reported an operating loss of $53 million, largely tied to increased SG&A expenses. Adjusted operating loss, however, improved $7 million to $16 million.
This was a strong quarter for Mattel, with positive performance and continued operational excellence. Our brands are thriving, our products and experiences stand out in the marketplace, and our balance sheet gives us resilience and flexibility to execute our strategy. As we navigate the current period of macroeconomic volatility, we are adapting with speed, agility, and discipline. We expect not only to manage through this period but [also to] strengthen our competitive position.”
Like some of its competitors, Mattel paused its full-year 2025 guidance, citing ongoing macroeconomic volatility and uncertainty around evolving U.S. tariff policies. The company reaffirmed its $600 million share repurchase target for the year after buying back $160 million in stock during the quarter.
By category, gross billings for vehicles rose 4% to $308 million, led by Hot Wheels, while action figures and games climbed 12% to $193 million. Doll sales were up 1% to $297 million, while preschool categories fell 6% to $126 million.
Looking ahead, the tariff troubles have Mattel accelerating diversification of its supply chain and further reducing reliance on China-sourced products. The company says it’s in the process of optimizing product sourcing and product mix, and will raise prices in the U.S. as needed.
