Mattel (0JZH) AI Stock Analysis

Company Guidance

Mattel reiterated full‑year 2026 guidance calling for net sales growth of 3%–6% in constant currency, adjusted gross margin of approximately 50%, adjusted operating income of $580M–$630M and adjusted EPS of $1.27–$1.39, while noting FX should be a roughly 1% tailwind to net sales and gross margin is expected to improve in H2 with no return to the heavy promotions seen at year‑end 2025. The company said 2026 includes $110M of strategic investments (with the majority of a $40M digital user‑acquisition spend deferred to UNO Wild’s commercial launch in 2027), expects ~ $50M of Optimizing for Profitable Growth savings this year (part of a $225M program with $205M realized to date), and noted Q2 operating results and drivers: Q2 adjusted gross margin 48.6% (—170 bps tariffs, —120 bps inflation, —110 bps royalties, —60 bps FX; +120 bps from Mattel163, +80 bps other), Q2 adjusted operating income $39M, adjusted EBITDA $95M, adj. EPS $0.01, Mattel163 contributed ~$49M revenue and ~$14M adj. operating income in the quarter, TTM free cash flow $435M, cash $524M, total debt comparable with a 3x leverage ratio, owned inventory $830M, retailer inventories down low double digits, and share repurchases of $100M in the quarter ($300M YTD, $400M full‑year target, $1.5B repurchased since 2023, ~23% fewer shares outstanding); guidance excludes any material tariff refund benefit.