Mattel Q2 revenue +10.5% but operating income plunges 86% on tariffs, royalties, and A&P surge

Filed August 6, 2026 · Period ending June 30, 2026 · Compared to 10-Q Jul 29, 2025 · ~2 min read

Key Changes

• high

  Operating income collapsed 86% to $10.9M (1.0% margin) from $78.5M (7.7% margin) in Q2 2025, driven by gross margin compression from tariffs (-170 bp), inflation (-120 bp), higher royalties (-110 bp), and a 320 bp surge in advertising and promotion spend to 11.0% of sales.

  MD&A: Operating Results verify on EDGAR →
• high

  Gross margin fell 270 bp to 48.2% from 50.9% in Q2 2025. Tariff costs alone reduced margin by 170 bp; the company received immaterial IEEPA tariff refunds in Q2 2026 but has not recognized a receivable for additional refunds due to ongoing litigation and appeals, though the impact could be material.

  MD&A: Gross Margin & Notes: Tariff Contingency verify on EDGAR →
• high

  Material weakness in internal control over financial reporting remediated; disclosure controls now deemed effective as of June 30, 2026 after a new ERP system was implemented in Q2 2026.

  Controls and Procedures verify on EDGAR →