Mattel Inc

Danish toy giant Lego reported a 21% increase in revenue to 41.9 billion Danish kroner ($6.54 billion) and a 32% rise in net profit to 8.6 billion kroner for the first half of the year, achieving growth in both revenue and profit. Products themed around the soccer World Cup and Formula One attracted new customers, boosting performance. Lego's strategy of partnering with movies and popular series, along with increased production of adult-oriented sets, has led to growth surpassing competitors like Mattel and Hasbro in the U.S., expanding its market share. CEO Niels Christiansen said, "The product portfolio is very strong, and we have successfully captured new popular areas." In the first half, Lego launched over 330 new sets, including a $199.99 replica of the World Cup trophy and Pokemon sets. However, rising plastic costs due to high oil prices stemming from the situation in Iran could impact the second half of the year.

Mattel reported second-quarter 2026 net sales of $1.13 billion, up 10% year over year and 4.2% above the Zacks Consensus Estimate of $1.08 billion, while adjusted earnings fell to 1 cent per share from 21 cents a year earlier and missed the consensus estimate of 3 cents by 66.7%. Worldwide Vehicles gross billings increased 11% in constant currency to $463 million, mainly on Hot Wheels growth, and Action Figures, Building Sets, Games and Other gross billings rose 33% in constant currency to $358 million, helped by games, Mattel163 and action figures tied to theatrical releases. Adjusted gross margin declined 260 basis points year over year to 48.6%, with tariffs reducing margin by 170 basis points, inflation by 120 basis points, higher royalties by 110 basis points and foreign exchange by 60 basis points, while Mattel163 contributed 120 basis points of benefit and tariff-mitigation actions and Optimizing for Profitable Growth savings added another 80 basis points. Management reaffirmed full-year 2026 guidance for constant-currency net sales growth of 3% to 6%, adjusted operating income of $580 million to $630 million, adjusted earnings of $1.27 to $1.39 per share and adjusted gross margin of about 50%, with sequential improvement expected in the second half. The stock carries a Zacks Rank of 3, or Hold, with a Value Score of A and VGM Score of B, while its Growth Score of C and Momentum Score of D are less favorable.

Mattel reported first-quarter revenues of $862.2 million, up 4.3% year on year and exceeding analysts' expectations by 6.6%, the biggest beat among four tracked consumer discretionary toys and electronics stocks. The company also raised its full-year EPS guidance above estimates and posted a decent beat on adjusted operating income. Despite the strong results, Mattel shares have fallen 6.6% since the report, trading at $13.90. Among peers, Hasbro delivered the fastest revenue growth at $1 billion, up 12.7%, but its stock dropped 13.4%, while Funko shares surged 21.7% after beating estimates and raising guidance. Bark was the weakest performer, with revenues down 25% to $86.57 million, missing estimates and issuing disappointing guidance.