Mattel Misses Q2 Profit Estimate as Tariffs and 57% Marketing Surge Erase Margins

Mattel's second-quarter adjusted profit fell to 1 cent per share on August 4, far below the 4-cent estimate, according to earnings reported by Reuters. Net sales reached $1.12 billion, beating the $1.10 billion consensus from LSEG data; however, adjusted gross margin declined 260 basis points to 48.6%, and adjusted operating income tumbled 60%.

The company attributed the margin compression to tariffs, inflation, higher royalty expenses, and unfavorable currency movements. Advertising and promotion spending surged 57% year-over-year, driving the bottom-line miss despite revenue strength. Hasbro, by contrast, recently raised its full-year forecasts, crediting resilient digital gaming demand and strength in Magic: The Gathering.