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What changed in MATTEL INC /DE/'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of MATTEL INC /DE/'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+349 added−336 removedSource: 10-K (2026-02-23) vs 10-K (2025-02-26)

Top changes in MATTEL INC /DE/'s 2025 10-K

349 paragraphs added · 336 removed · 269 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

55 edited+18 added−12 removed30 unchanged
Biggest changeIn production for over 50 years, Hot Wheels continues to push the limits of performance and design, and ignites and nurtures the challenger spirit of kids, adults, and collectors. From die-cast vehicles to tracks, playsets, and accessories, the Mattel Vehicles portfolio has broad appeal that engages and excites fans of all ages.
Biggest changeFrom die-cast vehicles to tracks, playsets, and accessories, the Mattel Vehicles portfolio has broad appeal that engages and excites fans of all ages. Infant, Toddler, and Preschool —including brands such as Fisher-Price (including Little People ) and Thomas & Friends , is organized into three subcategories: Fisher-Price , Preschool Entertainment, and Baby Gear and Power Wheels .
International Segment Products marketed and sold by the International segment are generally the same as those marketed and sold by the North America segment, although some are developed or adapted for particular international markets.
International Segment Products marketed and sold by the International segment are generally the same as those marketed and sold by the North America segment, although some products are developed or adapted for particular international markets.
For additional information regarding foreign currency contracts, see Part II, Item 7A "Quantitative and Qualitative Disclosures About Market Risk" and Part II, Item 8 "Financial Statements and Supplementary Data—Note 12 to the Consolidated Financial Statements—Derivative Instruments." Government Regulations Mattel's products sold in the United States are subject to the provisions of the Consumer Product Safety Act, as amended by the Consumer Product Safety Improvement Act of 2008, and the Federal Hazardous Substances Act, and may also be subject to the requirements of the Flammable Fabrics Act or the Food, Drug, and Cosmetics Act and the regulations promulgated pursuant to such statutes.
For additional information regarding foreign currency contracts, see Part II, Item 7A "Quantitative and Qualitative Disclosures About Market Risk" and Part II, Item 8 "Financial Statements and Supplementary Data—Note 12 to the Consolidated Financial Statements—Derivative Instruments." 8 Government Regulations Mattel's products sold in the United States are subject to the provisions of the Consumer Product Safety Act, as amended by the Consumer Product Safety Improvement Act of 2008, and the Federal Hazardous Substances Act, and may also be subject to the requirements of the Flammable Fabrics Act or the Food, Drug, and Cosmetics Act and the regulations promulgated pursuant to such statutes.
Mattel's worldwide operations are subject to the requirements of various environmental laws and regulations in the jurisdictions where those operations are located. Mattel believes that it is in substantial compliance with these laws and regulations.
Mattel believes that it is in substantial compliance with these laws and regulations. Mattel's worldwide operations are subject to the requirements of various environmental laws and regulations in the jurisdictions where those operations are located. Mattel believes that it is in substantial compliance with these laws and regulations.
Mattel believes its rights to these properties are adequately protected, but there can be no assurance that its rights can be successfully asserted in the future or will not be invalidated, circumvented, or challenged. 7 Manufacturing and Materials Mattel manufactures toy products for all segments in both company-owned facilities and through third-party manufacturers.
Mattel believes its rights to these properties are adequately protected, but there can be no assurance that its rights can be successfully asserted in the future or will not be invalidated, circumvented, or challenged. Manufacturing and Materials Mattel manufactures toy products for all segments in both company-owned facilities and through third-party manufacturers.
American Girl , with an extensive portfolio of dolls and accessories, content, gaming, and lifestyle products, is best known for imparting valuable life lessons that instill confidence through its inspiring dolls and books, featuring characters from past and present.
American Girl , with an extensive portfolio of dolls and accessories, content, and lifestyle products, is best known for imparting valuable life lessons that instill confidence through its inspiring dolls and books, featuring characters from past and present.
Mattel believes that it is in substantial compliance with these federal and state laws and regulations. 8 Mattel's products sold worldwide are subject to the provisions of similar laws and regulations in many jurisdictions, including the European Union ("EU") and Canada. Mattel believes that it is in substantial compliance with these laws and regulations.
Mattel believes that it is in substantial compliance with these federal and state laws and regulations. Mattel's products sold worldwide are subject to the provisions of similar laws and regulations in many jurisdictions, including the European Union ("EU") and Canada. Mattel believes that it is in substantial compliance with these laws and regulations.
Mattel's products are sold directly to retailers and wholesalers in most European, Latin American, and Asian countries, in Australia and New Zealand, and through agents and distributors in those countries where Mattel has no direct presence. No individual country within the International segment exceeded 7% of worldwide consolidated net sales during 2024.
Mattel's products are sold directly to retailers and wholesalers in most European, Latin American, and Asian countries, in Australia and New Zealand, and through agents and distributors in those countries where Mattel has no direct presence. No individual country within the International segment exceeded 7% of worldwide consolidated net sales during 2025.
Additionally, offering the opportunity for employees to continuously learn and grow their careers at Mattel is a key driver of its employee engagement strategy. Around the globe, employees at all levels participate in a variety of online classes and instructor-led training, including professional development, management development, and technical training.
Additionally, offering the opportunity for employees to continually learn and grow their careers at Mattel is a key driver of its employee engagement strategy. Around the globe, employees at all levels participate in a variety of online classes and instructor-led training, including professional development, management development, and technical training.
Mattel also operates small retail outlets at certain corporate offices as a service to its employees and as an outlet for its products. The North America segment also includes American Girl products and its children's publications, which are sold directly to consumers and select retailers in the United States.
Mattel also operates small retail outlets at certain corporate offices as a service to its employees and as an outlet for its products. The North America segment also includes American Girl products and publications, which are sold directly to consumers and select retailers in the United States and Canada.
Action Figures, Building Sets, Games, and Other Mattel Action Figures will continue to collaborate with key licensor partners, such as Disney Pixar , Microsoft , NBCUniversal , and WWE to bring innovative products to the global marketplace.
Action Figures, Building Sets, Games, and Other Mattel Action Figures will continue to collaborate with key licensor partners, such as Disney Pixar , Microsoft , NBCUniversal , Warner Bros. , and WWE to bring innovative products to the global marketplace.
Mattel is the owner of a portfolio of iconic brands and partners with global entertainment companies to license other IP. Mattel's portfolio of owned and licensed brands and products are organized into the following categories: Dolls —including brands such as Barbie , American Girl , Disney Princess , Disney Frozen , Monster High, and Polly Pocket .
Mattel is the owner of a portfolio of iconic brands and partners with global entertainment companies to license other IP. Mattel's portfolio of owned and licensed brands and products are organized into the following categories: Dolls —including brands such as Barbie , American Girl , Disney Princess , Disney Frozen , Monster High, Polly Pocket, and KPop Demon Hunters .
The elevated accounts receivable and inventory levels may result in seasonal working capital financing requirements. 6 Sales Mattel's products are sold throughout the world. Products within the North America segment include products sold directly to retailers, including omnichannel retailers, discount and free-standing toy stores, chain stores, department stores, other retail outlets, and, to a limited extent, wholesalers.
The elevated accounts receivable and inventory levels may result in seasonal working capital financing requirements. Sales Mattel's products are sold throughout the world. Products within the North America segment include products sold directly to retailers, including omnichannel retailers, discount and freestanding toy stores, chain stores, department stores, other retail outlets, and, to a limited extent, wholesalers.
Human Capital As of December 31, 2024, Mattel had approximately 34,000 employees (including temporary and seasonal employees) working in over 37 countries worldwide to create innovative products and experiences that inspire fans, entertain audiences, and develop children through play.
Human Capital As of December 31, 2025, Mattel had approximately 31,000 employees (including temporary and seasonal employees) working in 34 countries worldwide to create innovative products and experiences that inspire fans, entertain audiences, and develop children through play.
Dolls Barbie continues to deliver innovation, purpose-driven marketing campaigns, and engaging toys connected to a strong system of play. Barbie has broad product offerings, with product lines designed to appeal to children of multiple age groups, complemented by a Barbie Signature line with high-quality dolls that appeal to fans of all ages.
Dolls Barbie continues to innovate, creating purpose-driven marketing campaigns and engaging toys connected to a strong system of play. Barbie has a broad range of product offerings, with product lines designed to appeal to children of multiple age groups, complemented by a Barbie Signature line with high-quality dolls that appeal to fans of all ages.
Mattel values a wide range of ideas and voices that help evolve and broaden its perspectives, with a reach that extends to consumers, customers, business partners, and suppliers. 9 Employee Development and Well-Being Mattel believes continuously developing skills and capabilities for the future is essential to operating as an IP-driven, high-performing toy and family entertainment company.
Mattel values a wide range of ideas and voices that help evolve and broaden its perspectives, with a reach that extends to consumers, customers, business partners, and suppliers. Employee Development and Well-Being Mattel believes continually developing skills and capabilities for the future is essential to operating as an IP-driven, high-performing play and family entertainment business.
Competition and Industry Background Mattel is a worldwide leader in the manufacture, marketing, and sale of toys, games, and other products related to play, entertainment, learning, and development. Competition in the toy industry is based primarily on quality, play value, brands, and price.
Competition and Industry Background Mattel is a worldwide leader in the design, manufacture, marketing, and sale of toys, games, and other products related to play, entertainment, learning, and development. Competition in the toy industry is based primarily on product quality, play value, brand recognition, innovation, and price.
Approximately 29,600 employees (86% of the total workforce) are located outside the United States, with a significant global manufacturing labor workforce of approximately 25,100 employees. The remaining workforce focuses on design, marketing, sales, finance, and other aspects of Mattel's business. Mattel believes recruiting, developing, and motivating a talented global workforce are important to its long-term growth and success.
Approximately 26,000 employees (85% of the total workforce) are located outside the United States, with a significant global manufacturing labor workforce of approximately 22,000 employees. The remaining workforce focuses on design, marketing, sales, finance, and other aspects of Mattel's business. Mattel believes recruiting, developing, and motivating a talented global workforce are important to its long-term growth and success.
Monster High will look to build upon the success of its global re-launch, including planned new content and product offerings. American Girl is a direct marketer, retailer, and children's publisher dedicated to its mission to help girls grow up with courage, confidence, and strength of character.
Monster High will look to build upon the success of its global relaunch, including new product offerings, partnerships, and marketing campaigns. American Girl is a direct marketer, retailer, and children's book publisher dedicated to its mission to help girls grow up with courage, confidence, and strength of character.
Action Figures, Building Sets, Games, and Other —including brands such as Masters of the Universe , MEGA , UNO , Jurassic World ( NBCUniversal ), Minecraft ( Microsoft ), WWE , and Star War s ( Disney's Lucasfilm ).
Action Figures, Building Sets, Games, and Other —including brands such as Masters of the Universe , Mattel Brick Shop , MEGA , UNO , Jurassic World ( NBCUniversal ), Minecraft ( Microsoft ), WWE , Toy Story (Disney Pixar), and Star War s ( Disney's Lucasfilm ).
To provide greater flexibility in the manufacture and delivery of its products, and as part of a continuing effort to reduce manufacturing costs, Mattel has concentrated production of most of its core products in company-owned facilities and generally uses third-party manufacturers for the production of non-core products. Mattel's principal manufacturing facilities are located in China, Indonesia, Malaysia, Mexico, and Thailand.
To provide greater flexibility in the manufacture and delivery of its products, and as part of a continuing effort to reduce manufacturing costs, Mattel has concentrated production of most of its core products in company-owned facilities and generally uses third-party manufacturers for the production of non-core products.
Infant, Toddler, and Preschool In 2025, Fisher-Price will continue its focus on engaging consumers as a trusted partner for families with infants, toddlers and preschoolers, and remain dedicated to giving families the best possible start to life. Consumer-centric innovation will continue to drive new product offerings across the portfolio.
Infant, Toddler, and Preschool In 2026, Fisher-Price will continue to engage consumers as a trusted partner for families with infants, toddlers, and preschoolers, and remain dedicated to giving families the best possible start to life. Consumer-centric innovation is expected to drive differentiation through new product offerings across the portfolio.
In addition, Mattel's web-based products and services and other online and digital communications activity are or may be subject to U.S. and foreign privacy-related regulations, including the U.S. Children's Online Privacy Protection Act of 1998 and the EU General Data Protection Regulation and related national regulations.
In addition, Mattel's web-based products and services and other online and digital communications activity are or may be subject to U.S. and foreign data protection-related regulations, including the EU's General Data Protection Regulation and related national regulations, the EU Artificial Intelligence Act, the EU Data Act, China's Personal Information Protection Law, the U.S.
The North America and International segments sell products across Mattel's categories, although some products are developed and adapted for particular international markets, and American Girl products are sold only in North America. 4 For additional information on Mattel's worldwide gross billings by brand category, see Part II, Item 7 "Management's Discussion and Analysis of Financial Condition and Results of Operations—Results of Operations." North America Segment The North America segment markets and sells toys and consumer products in the United States and Canada across all of Mattel's categories.
For additional information on Mattel's worldwide gross billings by brand category, see Part II, Item 7 "Management's Discussion and Analysis of Financial Condition and Results of Operations—Results of Operations." North America Segment The North America segment markets and sells toys and consumer products in the United States and Canada across all of Mattel's categories.
Item 1. Business. Throughout this report "Mattel" refers to Mattel, Inc. and/or one or more of its subsidiaries. Mattel is a leading global toy and family entertainment company and owner of one of the most iconic brand portfolios in the world. Mattel creates innovative products and experiences that inspire fans, entertain audiences, and develop children through play.
Item 1. Business. Throughout this report "Mattel" refers to Mattel, Inc. and/or one or more of its subsidiaries. Mattel is a leading global play and family entertainment company and owner of one of the most iconic brand portfolios in the world.
Mattel will continue to partner with Disney Pixar for Cars to drive innovation, including fresh new product offerings to support key promotional events in 2025.
Mattel will continue to partner with Disney Pixar for Cars to drive innovation and celebrate the franchise's 20 th anniversary in 2026, including fresh new product offerings to support key promotional events.
Workplace Culture Mattel is committed to fostering a culture where all employees have the opportunity to realize their full potential. Management regularly collects feedback to measure employee engagement and job satisfaction on an ongoing basis through its annual global engagement survey, which is used to help improve the employee experience and strengthen its workplace culture.
Management regularly collects feedback to measure employee engagement and job satisfaction on an ongoing basis through its annual global engagement survey, which is used to help improve the employee experience and strengthen its workplace culture.
Mattel offers a wide range of products for children, fans of all ages, and families that include, among others, toys for infants, toddlers, and preschoolers, toys for school-aged children, dolls, vehicles, action figures, building sets, games, including digital, puzzles, plush, educational toys, technology-related products, media-driven products, and fashion-related items.
Mattel offers a wide range of products across multiple age groups and consumer segments that include, among others, toys for infants, toddlers, preschoolers, and school-aged children, as well as products targeted towards adult fans and collectors. These offerings include dolls, vehicles, action figures, building sets, games (including digital), puzzles, plush, educational and technology-enabled products, media-driven products, and fashion-related items.
These seasonal purchasing patterns and requisite production lead times create risk to Mattel's business associated with the underproduction of popular toys and the overproduction of less popular toys that do not match consumer demand.
A significant portion of retailer purchasing typically occurs in the third and fourth quarters of the year in anticipation of holiday buying. These seasonal purchasing patterns and requisite production lead times create risk to Mattel's business associated with the underproduction of popular toys and the overproduction of less popular toys that do not match consumer demand.
Mattel's Dolls portfolio is driven by the flagship Barbie brand and a collection of complementary brands offered globally. Empowering girls since 1959, Barbie has inspired the limitless potential of every girl by showing them that they can be anything.
Mattel's Dolls portfolio is driven by the flagship Barbie brand and a collection of complementary brands offered globally. Empowering girls since 1959, Barbie has inspired the limitless potential in every girl, sparking imaginations and shaping futures through play.
Such retailers can and do promote their own private-label toys, facilitate the sale of competitors' toys, showcase toys online based on proprietary algorithms, and allocate shelf space to one type of toy over another. Online distributors are able to promote a wide variety of toys and represent a wide variety of toy manufacturers.
Retailers can and do promote their own private-label, retailer-owned, and exclusive-branded toys, facilitate the sale of competitors' toys, allocate physical and digital shelf space to one type of toy over another, and showcase toys online based on proprietary algorithms.
See Part II, Item 7 "Management's Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Commitments" and Part II, Item 8 "Financial Statements and Supplementary Data—Note 13 to the Consolidated Financial Statements—Commitments and Contingencies." Mattel licenses a number of its trademarks and other property rights to others for use in connection with the sale of their products.
See Part II, Item 7 "Management's Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Commitments" and Part II, Item 8 "Financial Statements and Supplementary Data—Note 13 to the Consolidated Financial Statements—Commitments and Contingencies." Mattel licenses a number of its trademarks and other property rights to others for use in connection with the sale of their products. 7 Trademarks, Copyrights, and Patents Most of Mattel's products are sold under and are associated with trademarks, trade names, and copyrights, and some of these products incorporate devices or designs for which patent protection has been, or is being, pursued.
(including DC Universe and Harry Potter ), Microsoft (including Minecraft and Halo ), WWE, Pokémon, and Paramount (relating to its Nickelodeon properties). Royalty expense for 2024, 2023, and 2022 was $244.1 million, $249.8 million, and $230.8 million, respectively.
(including DC Universe and Harry Potter ), Microsoft (including Minecraft and Halo ), WWE, Formula 1, Nintendo, and Paramount (relating to its Nickelodeon properties, including Teenage Mutant Ninja Turtles beginning in 2027). Royalty expense for 2025, 2024, and 2023 was $264.6 million, $244.1 million, and $249.8 million, respectively.
During 2023, Mattel's three largest customers (Walmart at $1.13 billion, Target at $0.67 billion, and Amazon at $0.60 billion) accounted for approximately 44% of worldwide consolidated net sales.
During 2025, Mattel's three largest customers (Walmart at $1.08 billion, Target at $0.63 billion, and Amazon at $0.52 billion) accounted for approximately 42% of worldwide consolidated net sales. During 2024, Mattel's three largest customers (Walmart at $1.17 billion, Target at $0.68 billion, and Amazon at $0.51 billion) accounted for approximately 44% of worldwide consolidated net sales.
Infant, Toddler, and Preschool —including brands such as Fisher-Price (including Little People and Fisher-Price Wood ), Imaginext , and Thomas & Friends . As a leader in play and child development, Fisher-Price is dedicated to giving families the best possible start to life by making the most fun, enriching products for infants, toddlers, and preschoolers.
The first subcategory is Fisher-Price , the power brand, which includes core Infant and Toddler product lines. As a leader in play and child development, Fisher-Price is dedicated to giving families the best possible start to life by making the most fun, enriching products for infants, toddlers, and preschoolers.
Products within the International segment are sold directly to retailers and wholesalers in most European, Latin American, and Asian countries, in Australia and New Zealand, and through agents and distributors in those countries where Mattel has no direct presence. Mattel also has retail outlets in Latin America that serve as outlets for its products.
Products within the International segment are sold directly to retailers and wholesalers in most European, Latin American, and Asian countries, in Australia and New Zealand, and through agents and distributors in those countries where Mattel has no direct presence. Additionally, Mattel sells certain of its products directly to consumers through its e-commerce platform and various third-party e-commerce channels.
Mattel's Action Figures portfolio is comprised of product lines associated with licensed entertainment franchises, such as Jurassic World and WWE , as well as product lines from Mattel-owned IP, such as Masters of the Universe . As the challenger brand in Building Sets, MEGA inspires creativity through authentic building experiences for builders of all ages and fans of global franchises.
Mattel's Action Figures portfolio is comprised of product lines associated with licensed entertainment franchises, such as Jurassic World and WWE , as well as product lines from Mattel-owned IP, such as Masters of the Universe .
Hot Wheels product offerings are expected to excite consumers with innovation in both die-cast vehicles and tracks and playsets. These offerings will be supported by the animated children's series on Netflix, Hot Wheels Let ' s Race , and the new exciting partnership with Formula 1 , bringing fans of the sport a full range of Hot Wheels products.
These offerings will be supported by the animated children's series on Netflix , Hot Wheels Let ' s Race , and the expansion of the partnership with Formula 1 , bringing fans of the sport a full range of Hot Wheels products. Hot Wheels also seeks to further expand die-cast vehicle distribution, targeting fans of all ages.
Privacy-related laws also exist in some U.S. states, such as the California Consumer Privacy Act, as amended by the California Privacy Rights Act, and other state laws that are in effect, or are yet to take effect. Mattel believes that it is in substantial compliance with these laws and regulations.
Children's Online Privacy Protection Act of 1998, and Executive Order 14117. Privacy and data protection-related laws also exist in many U.S. states, such as the California Consumer Privacy Act, as amended by the California Privacy Rights Act, and other state laws that are in effect, or are yet to take effect.
Mattel was ranked among Forbes 2024 World's Best Employers; named to Fast Company's Most Innovative Companies of 2024 and Best Workplaces for Innovators in 2024; recognized by Newsweek as one of the World's Most Trustworthy Companies of 2024; honored by TIME as one of America's Best Mid-Size Companies of 2024; named to Computerworld's 2024 Best Places to Work in IT; and certified as a Great Place to Work in multiple countries.
Mattel was named one of Fast Company's Best Workplaces for Innovators in 2025; recognized by Newsweek as one of the World's Most Trustworthy Companies of 2025; ranked by Forbes as one of America's Best Employer's for Company Culture; named to Computerworld's 2025 Best Places to Work in IT; and certified as a Great Place to Work in multiple countries. 9 Workplace Culture Mattel is committed to fostering a culture where all employees have the opportunity to realize their full potential.
In 2025, American Girl looks to build on its momentum from 2024 with quality product drops, multiplatform content launches, immersive omnichannel experiences, and new promotional campaigns geared towards kids, shoppers, and adult fans.
In 2026, American Girl looks to continue its momentum from 2025 with quality product drops, multiplatform content launches, immersive omnichannel experiences, and promotional campaigns geared towards kids, shoppers, and adult fans. Vehicles In 2026, industry leader Hot Wheels expects to continue its strong momentum as a multigenerational franchise with consumer interest that remains at historic highs.
Thomas & Friends is an award-winning preschool train brand franchise that lays the tracks to inspire, entertain, and develop young train fans through toys, content, live events, and other consumer products. In the first quarter of 2024, Mattel further divided its Infant, Toddler, and Preschool category into three subcategories.
The second subcategory is Preschool Entertainment, which includes owned IP such as Thomas & Friends and partner entertainment brands. Thomas & Friends is an award-winning preschool train brand franchise that lays the tracks to inspire, entertain, and develop young train fans through toys, content, live events, and other consumer products.
The third subcategory is Baby Gear and Power Wheels , in which Mattel is strategically out-licensing or exiting certain product lines. Vehicles —including brands such as Hot Wheels (including Hot Wheels Monster Trucks and Hot Wheels RC ), Matchbox , and Cars ( Disney Pixar ).
The third subcategory is Baby Gear and Power Wheels, in which Mattel has strategically out-licensed or exited certain product lines.
Advertising includes television commercials, social media, catalogs, and internet advertisements. Promotions include in-store displays, merchandising materials, major events focusing on products, and tie-ins with various consumer products companies. During 2024, 2023, and 2022, Mattel incurred advertising and promotion expenses of $507.3 million (9.4% of net sales), $524.8 million (9.6% of net sales), and $534.3 million (9.8% of net sales), respectively.
Advertising includes digital and social media, television commercials, and catalogs, among others. Promotions include in-store displays, merchandising materials, major events focusing on products, and tie-ins with various consumer products companies.
In 2025, Barbie will continue to inspire multi-generational fans by delivering new products and captivating experiences through the year-long Limitless Possibilities marketing campaign, which Mattel expects will further amplify the franchise's impact globally. Mattel is also excited to build upon its strong partnerships with Disney for the Disney Princess and Disney Frozen product lines.
In 2026, Barbie will continue to inspire multi-generational fans through new products and captivating experiences. Mattel continues to build upon its strong licensed doll partnerships with Disney for the Disney Princess and Disney Frozen product lines and expects to launch its KPop Demon Hunters dolls line for Netflix in Spring of 2026.
The North America segment competes with several large toy companies, including Hasbro, Jazwares, LEGO, the Pokémon Company, Spin Master, many smaller toy companies, and manufacturers of digital games and consumer electronics. The North America segment also includes American Girl products which compete with companies that manufacture dolls and accessories, and with children's book publishers and retailers.
The North America segment competes with several large toy companies, including Hasbro, LEGO, The Pokémon Company, and Spin Master, as well as many smaller toy companies, and digital games, interactive entertainment, and consumer electronic companies, which increasingly compete for children's, families', and adults' discretionary spending and time.
The International segment competes with global toy companies including Hasbro, Jazwares, LEGO, the Pokémon Company, Spin Master, other national and regional toy companies, and manufacturers of digital games and consumer electronics. Foreign regions may include competitors that are strong in a particular toy line or geographical area but do not compete with Mattel or other international toy companies worldwide.
The International segment competes with global toy companies, including Hasbro, LEGO, The Pokémon Company, Spin Master, other national and regional toy companies, and digital games, interactive entertainment, and consumer electronic companies.
There is increasing competition among the above companies due to trends towards shorter life cycles for individual toy products, the phenomenon of children outgrowing toys at younger ages, an increasing use of more sophisticated technology in toys, including machine learning and artificial intelligence ("AI"), and an evolving path to purchase for consumers.
There is increasing competition among the above companies due to trends towards shorter product life cycles, children outgrowing traditional toys at younger ages, continued growth of the adult toy and collectibles market, greater demand for continuous innovation, and increasing incorporation of advanced technologies, including AI, into toys, games, and digital experiences.
Parents of preschoolers can continue to discover how the MEGA Bloks preschool building system enhances playtime and early childhood development beyond the Big Building Bag. 5 Mattel Games consists of some of the most beloved Games IP in the world including UNO , Pictionary , Skip-Bo , Phase-10, Blokus , and many others.
Mattel Games consists of some of the most beloved Games IP in the world including UNO , Pictionary , Skip-Bo , Phase-10, Blokus , and many others. Mattel plans to expand its Games portfolio through product innovation, brand extensions, digital games, and enhanced global distribution.
Financial Instruments Currency exchange rate fluctuations may impact Mattel's results of operations and cash flows.
During 2025, 2024, and 2023, Mattel incurred advertising and promotion expenses of $522.0 million (9.8% of net sales), $507.3 million (9.4% of net sales), and $524.8 million (9.6% of net sales), respectively. Financial Instruments Currency exchange rate fluctuations may impact Mattel's results of operations and cash flows.
Within Games, UNO is the classic matching card game that is easy to learn and fast fun for everyone. Other includes Plush, which contains products associated with movie releases from licensed entertainment franchises, as well as Mattel-owned IP.
Within Games, UNO is the classic matching card game that is easy to learn and fast fun for everyone, while the rest of the portfolio includes beloved heritage games such as Pictionary , Skip-Bo , Phase 10 , and Blokus .
In conjunction with Mattel's cost savings programs, Mattel discontinued production at a plant located in China in 2024 and intends to discontinue production at another plant located in China in 2025.
Mattel's principal manufacturing facilities are owned or third-party plants located in China, Vietnam, Indonesia, Malaysia, Mexico, and Thailand. In conjunction with Mattel's cost savings programs, Mattel discontinued production at two plants located in China, one in 2024 and the other in 2025.
Seasonality Mattel's business is highly seasonal, with consumers making a large percentage of all toy purchases during the traditional holiday season. A significant portion of retailer purchasing typically occurs in the third and fourth quarters of the year in anticipation of holiday buying.
Online marketplaces also expand consumer access to a broad assortment of products from many manufacturers, furthering competition across categories. 6 Seasonality Mattel's business is highly seasonal, with consumers making a large percentage of all toy purchases during the traditional holiday season.
In addition, Mattel manages its exposure to currency exchange rate fluctuations through the selection of currencies used for international borrowings. Mattel does not trade in financial instruments for speculative purposes.
Mattel does not trade in financial instruments for speculative purposes.
Hot Wheels also seeks to further expand die-cast vehicle distribution, targeting fans of all ages. Die-cast pioneer Matchbox expects to continue to bring exciting new products to market, including new sustainable die-cast products and toys tied to the theatrical release of NBCUniversal ' s Jurassic World: Rebirth .
Die-cast pioneer Matchbox expects to continue to bring exciting new products to market, including new die-cast offerings and toys tied to Apple Original Films Matchbox The Movie premiering in Fall 2026.
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Mattel is focused on the following strategy to grow its intellectual property ("IP") driven toy business and expand its entertainment offering: • Grow toy business profitably through scaling Mattel's portfolio, optimizing operations, evolving demand creation, and growing franchise brands; and • Expand entertainment offering to capture the full value of Mattel's IP outside the toy aisle in highly accretive business verticals, by growing franchise brands and accelerating content, consumer products, and digital and live experiences.
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Mattel's mission is to create innovative products and experiences that inspire fans, entertain audiences, and develop children through play, and its purpose is to empower generations to explore the wonder of childhood and reach their full potential.
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The first subcategory is Fisher-Price , the power brand, which includes the core Infant, Little People , and Newborn product lines, as well as the recently launched Fisher-Price Wood product line. The second subcategory is Preschool Entertainment, which includes owned IP such as Thomas & Friends and Barney , Mattel's character based Imaginext line, and partner entertainment brands.
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Mattel is focused on the following new brand-centric strategy to grow its intellectual property ("IP") driven play and family entertainment business: • Grow its toy brands with more breakthrough innovation and adult fans and collectors, as well as evolved demand creation; • Expand its direct-to-consumer and commercial reach through first party data, retail development, and new channels; • Broaden content offering in film, television, and short-form content, accelerate licensing in consumer products, location-based entertainment, and publishing, and expand with new business models; • Scale digital play through mobile games self-publishing, Mattel163 mobile games studio, licensing, and creator platforms; and • Optimize operations and leverage artificial intelligence ("AI") across its systems and supply chain.
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Business Segments In the first quarter of 2024, Mattel implemented an organizational change integrating the American Girl business into Mattel's North America commercial organization, which resulted in a change to Mattel's operating and reportable segments. Mattel's new reportable segments are: (i) North America and (ii) International. The prior period amounts have been reclassified to conform to the current period presentation.
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Vehicles —including brands such as Hot Wheels (including Hot Wheels Monster Trucks and Hot Wheels RC ), Matchbox , and Cars ( Disney Pixar ). Hot Wheels has continued to push the limits of performance and design since 1968, and ignites and nurtures the challenger spirit in kids, adults, and collectors.
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Fisher-Price Wood will continue to expand globally, leveraging popular themes and trend-based aesthetics, while Little People will look to build on its strong momentum with the expansion of the Little People Core line and Little People Collector line.
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Introduced in 2025 as a new challenger brand in Building Sets, Mattel Brick Shop is designed to introduce differentiated building experiences through innovative features, materials, and techniques intended to expand traditional building play.
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Thomas & Friends will be celebrating its 80 th anniversary with numerous activations throughout the year and also launch exciting new products with classic characters and train play. Vehicles In 2025, industry leader Hot Wheels expects to continue its strong momentum as a multigenerational franchise with consumer interest that remains at historic highs.
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Other includes Plush, which contains products associated with movie releases from licensed entertainment franchises such as Minecraft, as well as Mattel-owned IP. 4 Business Segments Mattel's reportable segments are: (i) North America and (ii) International. The North America and International segments sell products across Mattel's categories, although some products are developed or adapted for particular international markets.
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Mattel's 2025 Action Figures product lines will include toys tied to theatrical releases for NBCUniversal ' s Jurassic World: Rebirth and Microsoft ' s Minecraft ( Minecraft the Movie ), as well as new releases within Masters of the Universe and WWE .
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Hot Wheels product offerings are expected to excite consumers with innovation in both die-cast vehicles and tracks and playsets.
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In Building Sets, MEGA inspires creativity through authentic building experiences for builders of all ages and fans of global franchises. Partnerships with some of the world's top franchises, including Pokémon , invite consumers to try MEGA building sets, while innovative building play, authentic details, compatible quality, and accessible value encourages consumers to stay in the MEGA building set collection.
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Little People will look to continue leveraging its distinctive form factor and style to unlock multi-category growth, including the launch of a new partnership with Nintendo .
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Mattel will focus on its expansion of Games into its direct-to-consumer business, collectability, and innovation. Additionally, Mattel expects to introduce new game extensions and partnerships that celebrate pop culture.
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In Fall 2026, Thomas & Friends plans for a full-franchise relaunch supported by a new brand foundation, refreshed character styling, expanded storytelling across core content platforms, and the introduction of a new toy line.
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In addition, Mattel competes with companies that sell non-toy products, such as electronic consumer products, digital games, as well as content and other entertainment companies.
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In 2026, the Action Figures portfolio will be supported by theatrical releases such as Disney Pixar's Toy Story 5 and Mattel's own worldwide theatrical release of Masters of the Universe with Amazon MGM Studios scheduled for Summer 2026, which are expected to drive new and refreshed product lines.
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Competition continues to be heavily influenced by the fact that a small number of retailers account for a large portion of all toy sales, allocate the shelf space from which toys are viewed, and have direct contact with parents and children through in-store and online purchases.
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In addition, Mattel will continue product development, innovation, and line extensions related to NBCUniversal's Jurassic World and Microsoft's Minecraft , and launch a new product line for Warner Bros. DC Universe in the second half of 2026. 5 Mattel's Masters of the Universe theatrical release will be supported by a new product line intended to reinvigorate and modernize the franchise.
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Additionally, Mattel sells certain of its products directly to consumers through its e-commerce platform and various third-party e-commerce channels. During 2024, Mattel's three largest customers (Walmart at $1.17 billion, Target at $0.68 billion, and Amazon at $0.51 billion) accounted for approximately 44% of worldwide consolidated net sales.
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Mattel anticipates expanding the franchise beyond its historical collector base to a broader, multi-audience model, including children. Integrated marketing, content, and distribution initiatives are expected to support consumer awareness, engagement, and expanded brand reach, including in international markets.
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Trademarks, Copyrights, and Patents Most of Mattel's products are sold under and are associated with trademarks, trade names, and copyrights, and some of these products incorporate devices or designs for which patent protection has been, or is being, pursued.
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Within Building Sets, Mattel plans to further develop and extend its Mattel Brick Shop portfolio with additional scales and new product introductions utilizing both owned and licensed IP. In addition, parents of preschoolers can continue to discover how the MEGA Bloks preschool building system enhances playtime and early childhood development beyond the Big Building Bag .
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UNO is expected to remain an important focus of the portfolio with plans to further fuel fandom through elevated events such as the launch of the UNO Championship Series and UNO Social Club. Mattel also plans to refresh heritage Games brands, continue investment in adult-focused party and strategy games, and explore opportunities to expand Games across direct-to-consumer and digital platforms.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeFurther trade actions by the United States or China, or trade actions by or directed toward other countries, such as Mexico or Canada, could result in diverting more production to, or sourcing from, countries other than China or Mexico, could raise the cost of Mattel products in those markets, and could cause customers in those markets to seek domestic or non-U.S. sources for products that Mattel sells, 16 or to be pressured or incentivized by foreign governments not to purchase goods of U.S. companies, all of which could harm Mattel's future sales in these those markets, adversely affecting Mattel's business, financial condition, and results of operations.
Biggest changeFor example, diverting production or sourcing away from a country such as China could raise the cost of Mattel products in China (as well as other countries) and could cause customers in China to seek domestic or non-U.S. sources for products that Mattel sells, or to be pressured or incentivized to not purchase goods of Mattel or U.S. companies, generally, which could adversely impact Mattel's future sales.
Mattel's business depends in large part on the success of its vendors and outsourcers, and Mattel's brands and reputation are subject to harm from actions taken by third parties that are outside Mattel's control. In addition, any significant failure, inadequacy, or interruption from such vendors or outsourcers could harm Mattel's ability to effectively operate its business.
Mattel's business depends in large part on the success of its vendors and outsourcers, and Mattel's brands and reputation are subject to harm from actions taken by such third parties that are outside Mattel's control. In addition, any significant failure, inadequacy, or interruption from such vendors or outsourcers could harm Mattel's ability to effectively operate its business.
In addition, problems with transitioning these services and systems to, or operating failures with, these vendors and outsourcers cause delays in product sales and reduce the efficiency of Mattel's operations, and significant capital investments could be required to remediate the problem.
In addition, problems with transitioning these services and systems to, or operating failures with, these vendors and outsourcers could cause delays in product sales and reduce the efficiency of Mattel's operations, and significant capital investments could be required to remediate the problem.
For more information, see Part II, Item 8 "Financial Statements and Supplementary Data—Note 6 to the Consolidated Financial Statements—Seasonal Financing and Debt." Subject to the limits contained in the credit agreement that governs Mattel's revolving credit facility, the indentures that govern the notes, and Mattel's other debt instruments, Mattel may incur substantial additional debt from time to time to finance working capital, capital expenditures, investments or acquisitions, or for other purposes.
For more information, see Part II, Item 8 "Financial Statements and Supplementary Data—Note 6 to the Consolidated Financial Statements—Seasonal Financing and Debt." Subject to the limits contained in the credit agreement that governs Mattel's revolving credit facility, the indentures that govern Mattel's notes, and Mattel's other debt instruments, Mattel may incur substantial additional debt from time to time to finance working capital, capital expenditures, investments or acquisitions, or for other purposes.
For example, it could: • Require Mattel to dedicate a substantial portion of its cash flow from operations to payments on Mattel's indebtedness, thereby reducing the availability of Mattel's cash flow to fund acquisitions, working capital, capital expenditures, research and development efforts, and other general corporate purposes; • Increase Mattel's vulnerability to, and limit Mattel's flexibility in planning for or reacting to, changes in its business and the industries in which it operates; • Restrict Mattel from making strategic acquisitions or cause Mattel to make non-strategic divestitures; • Expose Mattel to the risk of increased interest rates as borrowings under its revolving credit facility will be subject to variable rates of interest; • Expose Mattel to additional risks related to currency exchange rates and repatriation of funds; • Place Mattel at a competitive disadvantage compared to its competitors that have less debt; and 23 • Limit Mattel's ability to obtain additional debt or equity financing for working capital, capital expenditures, business development, debt service requirements, acquisitions, and general corporate or other purposes.
For example, it could: 23 • Require Mattel to dedicate a substantial portion of its cash flow from operations to payments on Mattel's indebtedness, thereby reducing the availability of Mattel's cash flow to fund acquisitions, working capital, capital expenditures, research and development efforts, and other general corporate purposes; • Increase Mattel's vulnerability to, and limit Mattel's flexibility in planning for or reacting to, changes in its business and the industries in which it operates; • Restrict Mattel from making strategic acquisitions or cause Mattel to make non-strategic divestitures; • Expose Mattel to the risk of increased interest rates as borrowings under its revolving credit facility will be subject to variable rates of interest; • Expose Mattel to additional risks related to currency exchange rates and repatriation of funds; • Place Mattel at a competitive disadvantage compared to its competitors that have less debt; and • Limit Mattel's ability to obtain additional debt or equity financing for working capital, capital expenditures, business development, debt service requirements, acquisitions, and general corporate or other purposes.
For more information, see Part II, Item 7 "Management's Discussion and Analysis of Financial Condition and Results of Operations—Application of Critical Accounting Policies and Estimates—Goodwill" and Part II, Item 8 "Financial Statements and Supplementary Data—Note 3 to the Consolidated Financial Statements—Goodwill and Intangible Assets, Net." Mattel's stock price has been volatile over the past several years and could decline in the future, resulting in losses for Mattel's investors.
For more information, see Part II, Item 7 "Management's Discussion and Analysis of Financial Condition and Results of Operations—Application of Critical Accounting Policies and Estimates—Goodwill" and Part II, Item 8 "Financial Statements and Supplementary Data—Note 3 to the Consolidated Financial Statements—Goodwill and Identifiable Intangible Assets, Net." Mattel's stock price has been volatile over the past several years and could decline in the future, resulting in losses for Mattel's investors.
In addition, Mattel has certain anti-takeover provisions in its bylaws that may make it more difficult for a third party to acquire Mattel without its consent, which may adversely affect Mattel's stock price. 18 The level of returns on pension plan assets and the actuarial assumptions used for valuation purposes could affect Mattel's earnings in future periods.
In addition, Mattel has certain anti-takeover provisions in its bylaws that may make it more difficult for a third party to acquire Mattel without its consent, which may adversely affect Mattel's stock price. The level of returns on pension plan assets and the actuarial assumptions used for valuation purposes could affect Mattel's earnings in future periods.
In addition, quarterly fluctuations in Mattel's operating results, changes in investor and analyst perception of Mattel's business risks and conditions of its business, Mattel's ability to meet earnings estimates and other performance expectations of financial analysts or investors, unfavorable commentary or downgrades of Mattel's stock by research analysts, fluctuations in the stock prices of Mattel's peer companies or in stock markets in general, and general economic or political conditions can also cause the price of Mattel's stock to change.
In addition, quarterly fluctuations in Mattel's operating results, changes in investor and analyst perception of Mattel's business 19 risks and conditions of its business, Mattel's ability to meet earnings estimates and other performance expectations of financial analysts or investors, unfavorable commentary or downgrades of Mattel's stock by research analysts, fluctuations in the stock prices of Mattel's peer companies or in stock markets in general, and general economic or political conditions can also cause the price of Mattel's stock to change.
Tax authorities are increasingly scrutinizing the tax positions of companies and Mattel has tax audits pending in several jurisdictions. If the U.S. or foreign tax authorities change applicable tax laws or successfully challenge how or where Mattel's profits are currently recognized, Mattel's overall taxes could increase, and Mattel's business, financial condition or results of operations may be adversely impacted.
Tax authorities are increasingly scrutinizing the tax positions of companies and 22 Mattel has tax audits pending in several jurisdictions. If the U.S. or foreign tax authorities change applicable tax laws or successfully challenge how or where Mattel's profits are currently recognized, Mattel's overall taxes could increase, and Mattel's business, financial condition or results of operations may be adversely impacted.
Mattel's ongoing efforts to comply with the GDPR and other privacy and data protection laws, such as the PIPL, CCPA, CPRA, and COPPA, as well as initiatives to comply with new legal regimes relating to privacy, data protection, and AI, impose significant costs and challenges that are likely to increase over time, including as Mattel introduces sophisticated digital and smart technology products, including products that incorporate AI.
Mattel's ongoing efforts to comply with the GDPR and other privacy and data protection laws, such as the PIPL, CCPA, CPRA, and COPPA, as well as initiatives to comply with new legal regimes relating to privacy, data protection, and AI, impose significant costs and challenges that are likely to increase over time, including as Mattel introduces digital and smart technology products, including products that incorporate AI.
Mattel's failure to protect its proprietary IP and information, including with respect to any successful challenge to Mattel's 21 ownership of its IP or significant infringements of its IP, could have an adverse effect on Mattel's business, financial condition, and results of operations. Mattel has acquired, and may in the future acquire, certain IP from third parties.
Mattel's failure to protect its proprietary IP and information, including with respect to any successful challenge to Mattel's ownership of its IP or significant infringements of its IP, could have an adverse effect on Mattel's business, financial condition, and results of operations. Mattel has acquired, and may in the future acquire, certain IP from third parties.
Such risks include complications in complying with different laws in varying jurisdictions; dealing with changes in governmental policies and the evolution of laws and regulations that impact Mattel's product offerings and related enforcement; difficulties understanding the retail climate, consumer trends, local customs and competitive conditions in foreign markets, which are often quite different from those in the United States; difficulties in moving 15 materials and products from one country to another, including port congestion, strikes and other transportation delays and interruptions; potential challenges to Mattel's transfer pricing determinations and other aspects of its cross border transactions; and the impact of tariffs, trade restrictions, trade barriers, quotas, or other protectionist measures.
Such risks include complications in complying with different laws in varying jurisdictions; dealing with changes in governmental policies and the evolution of laws and regulations that impact Mattel's product offerings and related enforcement; difficulties understanding the retail climate, consumer trends, local customs and competitive conditions in foreign markets, which are often quite different from those in the United States; difficulties in moving materials and products from one country to another, including port congestion, strikes and other transportation delays and interruptions; potential challenges to Mattel's transfer pricing determinations and other aspects of its cross border transactions; and the impact of tariffs, trade restrictions, trade barriers, quotas, or other trade measures.
From time to time, third parties have challenged, and may in the future try to challenge, Mattel's ownership of its IP in the United States and around the world. Responding to any infringement claim, regardless of its validity, may be costly and time-consuming and may divert management and key personnel from business operations.
From time to time, third parties have challenged, and may in the future try to challenge, Mattel's ownership of its IP in the United States and around the world. Responding to any infringement claim, regardless of its validity, may be costly and time-consuming and may divert 21 management and key personnel from business operations.
Mattel attempts to respond to such trends and developments by modifying, refreshing, extending, and expanding its product offerings on an annual basis. 11 Mattel spends considerable resources in designing and developing toys and other products based on its and its license partners' planned content releases.
Mattel attempts to respond to such trends and developments by modifying, refreshing, extending, and expanding its product offerings on an annual basis. Mattel spends considerable resources in designing and developing toys and other products based on its and its license partners' planned content releases.
Mattel regularly considers, and from time to time engages in, discussions and negotiations regarding acquisitions, mergers, dispositions, or other strategic transactions that could affect the profit, revenues, profit margins, debt-to-capital ratio, capital expenditures, or other aspects of Mattel's business.
Mattel regularly considers, and from time to time engages in, discussions and negotiations regarding mergers, acquisitions, dispositions, investments, or other strategic transactions that could affect the revenues, profit, profit margins, debt-to-capital ratio, capital expenditures, or other aspects of Mattel's business.
If interest rates continue to increase, Mattel's debt service obligations on the variable rate indebtedness will increase even though the amount borrowed remains the same, and Mattel's net income and cash flows, including cash available for servicing its indebtedness, will correspondingly decrease.
If interest rates continue to increase, Mattel's debt service obligations on the variable rate indebtedness will increase even though the amount borrowed remains the same, and Mattel's net income and cash flows, including cash available for 24 servicing its indebtedness, will correspondingly decrease.
Media-based licenses can cause a line of toys or other products to gain immediate success among children, parents, or families. Trends in media, and children's characters change swiftly and contribute to the transience and uncertainty of play preferences.
Media-based licenses can cause a line of toys or other products to gain immediate success among children, parents, or families. Trends in media and children's characters change 11 swiftly and contribute to the transience and uncertainty of play preferences.
Mattel's ability to meet customer demand depends, in part, on its ability to obtain timely and adequate delivery of materials, parts, and components from its suppliers and internal manufacturing capacity. Mattel has experienced shortages in the past, including shortages of raw materials and components.
Mattel's ability to meet customer demand depends, in part, on its ability to obtain timely and adequate delivery of materials, parts, and components from its 15 suppliers and internal manufacturing capacity. Mattel has experienced shortages in the past, including shortages of raw materials and components.
Operating in new and emerging markets, each with its own unique consumer preferences and business climates, presents additional challenges that Mattel must meet. In addition, sales and operations in new and emerging markets are subject to other risks associated with international operations.
Operating in new or emerging markets, each with its own unique consumer preferences and business climates, presents additional challenges that Mattel must meet. In addition, sales and operations in new or emerging markets are subject to other risks associated with international operations.
Mattel has in the past engaged, and may in the future engage, in acquisitions, mergers, dispositions, or other strategic transactions, which can affect Mattel's revenues, profit, profit margins, debt-to-capital ratio, capital expenditures, or other aspects of Mattel's business.
Mattel has in the past engaged, and may in the future engage, in mergers, acquisitions, dispositions, investments, or other strategic transactions, which can affect Mattel's revenues, profit, profit margins, debt-to-capital ratio, capital expenditures, or other aspects of Mattel's business.
Unforeseen delays or difficulties in the development process or significant 13 increases in the planned cost of development for new Mattel products may cause the introduction date for products to be later than anticipated or, in some situations, may cause a product or new product introduction to be discontinued.
Unforeseen delays or difficulties in the development process or significant increases in the planned cost of development for new Mattel products may cause the introduction date for products to be later than anticipated or, in some situations, may cause a product or new product introduction to be discontinued.
Legal and Regulatory 19 Mattel relies extensively on information technology in its operations, and any material failure, inadequacy, interruption, or security breach of that technology could have an adverse effect on its business, financial condition, and results of operations.
Legal and Regulatory Mattel relies extensively on information technology in its operations, and any material failure, inadequacy, interruption, or security breach of that technology could have an adverse effect on its business, financial condition, and results of operations.
If Mattel's or its third-party service providers' systems fail to operate effectively or are damaged, destroyed, or shut down, or there are problems with transitioning to upgraded or replacement systems, or there are future security breaches in these systems, any of which could occur as a result of natural disasters, software or equipment failures, telecommunications failures, loss or theft of equipment, acts of terrorism, circumvention of security systems, or other cyber-attacks, including denial-of-service attacks, Mattel could experience delays or decreases in product sales and reduced efficiency of its operations.
If Mattel's or its third-party service providers' systems fail to operate effectively or are damaged, destroyed, or shut down, or there are problems with transitioning to upgraded or replacement systems, or there are future security compromises in these systems, any of which could occur as a result of natural disasters, software or equipment failures, telecommunications failures, loss or theft of equipment, acts of terrorism, circumvention of security systems, or other cyber-attacks, including denial-of-service attacks, Mattel could experience delays or decreases in product sales and reduced efficiency of its operations.
Management believes that the increase in "last minute" shopping during the holiday season and the popularity of gift cards (which often shift purchases to after the holiday season) may negatively impact customer re-orders during the holiday season. 12 In addition, as a result of the seasonal nature of Mattel's business, Mattel may be adversely affected, in a manner disproportionate to the impact on a company with sales spread more evenly throughout the year, by unforeseen events, such as pandemics or other public health crises, terrorist attacks, economic shocks, severe weather due to climate change or otherwise, earthquakes or other catastrophic events, that harm the retail environment or consumer buying patterns during its key selling season, or by other events, such as strikes, disruptions in transportation, port delays, regional conflict, tariffs, trade restrictions, or trade barriers, and geopolitical and macro-economic factors, including high inflation and high interest rates, that interfere with the manufacture or shipment of goods during the critical months leading up to the holiday purchasing season.
The increase in "last minute" shopping during the holiday season and the popularity of gift cards (which often shift purchases to after the holiday season) may negatively impact customer re-orders during the holiday season. 12 In addition, as a result of the seasonal nature of Mattel's business, Mattel may be adversely affected, in a manner disproportionate to the impact on a company with sales spread more evenly throughout the year, by unforeseen events, such as pandemics or other public health crises, terrorist attacks, economic shocks, severe weather due to climate change or otherwise, earthquakes or other catastrophic events, that harm the retail environment or consumer buying patterns during its key selling season, or by other events, such as strikes, disruptions in transportation, port delays, regional conflicts, tariffs, trade restrictions, or trade barriers, and geopolitical and macro-economic factors, including high inflation and high interest rates, that interfere with the manufacture or shipment of goods during the critical months leading up to the holiday purchasing season.
Mattel expects that children will continue to be interested in product offerings incorporating sophisticated technology, such as digital games, consumer electronics, and social and digital media, at increasingly younger ages.
Mattel expects that children will continue to be interested in product offerings incorporating technology, such as digital games, consumer electronics, and social and digital media, at increasingly younger ages.
Failure to follow applicable regulations related to those activities, or to prevent or mitigate data loss or other security breaches, including breaches of Mattel's business partners' technology and systems, can expose Mattel or its customers to a risk of loss or misuse of such information, which can adversely affect Mattel's operating results, result in regulatory enforcement, other litigation and potential liability for Mattel, and otherwise harm its business.
Failure to follow applicable regulations related to those activities, or to prevent or mitigate data loss or other security compromises, including compromises of Mattel's business partners' technology and systems, can expose Mattel or its customers to a risk of loss or misuse of such information, which can adversely affect Mattel's operating results, result in regulatory enforcement, litigation and potential liability for Mattel, and otherwise harm its business.
Disruptions due to political instability, civil unrest, the threat or occurrence of war or terrorist activities, pandemics or other public health crises, or earthquakes or other natural disasters out of Mattel's control and actions taken by governments, businesses, and individuals in response to such events could adversely affect Mattel's business, financial condition, and results of operations.
Disruptions due to political instability, civil unrest, the threat or occurrence of war or terrorist activities, pandemics or other public health crises, climate change, or earthquakes or other natural disasters out of Mattel's control and actions taken by governments, businesses, and individuals in response to such events could adversely affect Mattel's business, financial condition, and results of operations.
Indebtedness Mattel's substantial indebtedness could adversely affect its ability to raise additional capital to fund its operations, limit its ability to react to changes in the economy or its industry, and expose it to interest rate risk to the extent of its variable rate debt. At December 31, 2024, Mattel had $2.33 billion of indebtedness on a consolidated basis.
Indebtedness Mattel's substantial indebtedness could adversely affect its ability to raise additional capital to fund its operations, limit its ability to react to changes in the economy or its industry, and expose it to interest rate risk to the extent of its variable rate debt. At December 31, 2025, Mattel had $2.33 billion of indebtedness on a consolidated basis.
The material weakness, remediation efforts, and any related litigation, government investigations, or regulatory enforcement actions will require management attention and resources and cause Mattel to incur unanticipated costs, and could negatively affect investor confidence in Mattel's financial statements, cause Mattel reputational harm, and raise other risks to its operations.
A material weakness, remediation efforts, and any related litigation, government investigations, or regulatory enforcement actions will require management attention and resources and cause Mattel to incur unanticipated costs, and could negatively affect investor confidence in Mattel's financial statements, cause Mattel reputational harm, and raise other risks to its operations.
As a global company, Mattel is subject to a variety of continuously evolving and developing laws and regulations in the United States and abroad regarding privacy, data protection, AI, and data security, including those related to the collection, storage, handling, use, disclosure, transfer, and security of personal data.
As a global company, Mattel is subject to a variety of continuously evolving and developing laws, regulations, and Executive Orders in the United States and abroad regarding privacy, data protection, AI, and data security, including those related to the collection, storage, handling, use, disclosure, transfer, and security of personal data.
Any inability by Mattel to accurately anticipate trends in popular culture, media, fashion, or technology may cause its products not to be accepted by children, parents, fans, or families and may adversely affect its sales, financial condition, and results of operations.
Any inability by Mattel to accurately anticipate trends in popular culture, media, fashion, or technology may cause its products not to be accepted by children, parents, fans, or families and may adversely affect its business, financial condition, and results of operations.
Any failure, or perceived failure, by Mattel or third-party service providers to comply with Mattel's privacy or security policies or privacy-related legal obligations, or any compromise of security that results in the unauthorized release or transfer of personal data, may result in governmental enforcement actions, litigation, or negative publicity, and could have an adverse effect on Mattel's operating results and financial condition.
Any failure, or perceived failure, by Mattel or third-party service providers to comply with Mattel's privacy or security policies or privacy-related legal obligations, or any compromise of security that results in the unauthorized release or transfer of personal data, may result in governmental enforcement actions, litigation, or negative publicity, and could have an adverse effect on Mattel's business, financial condition, and results of operations.
Litigation, government investigations, or regulatory enforcement actions arising out of any such failure or alleged failure could subject Mattel to civil and criminal penalties that could materially and adversely affect Mattel's reputation, financial condition, and operating results.
Litigation, government investigations, or regulatory enforcement actions arising out of any such failure or alleged failure could subject Mattel to civil and criminal penalties that could materially and adversely affect Mattel's reputation, financial condition, and results of operations.
The pace of change in product offerings and consumer tastes for sophisticated technology products is potentially even greater than for Mattel's more traditional products, and consequently the window for consumer interest in such products may be shorter than for traditional toys and games.
The pace of change in product offerings and consumer tastes for products incorporating technology is potentially even greater for Mattel's more traditional products, and consequently the window for consumer interest in such products may be shorter than for traditional toys and games.
Foreign, federal, state, and local governments have and may in the future focus on enacting laws and regulations regarding the management of, or disclosure regarding, sustainability matters, such as, among other topics, climate change and the regulation of greenhouse gas (“GHG”) emissions, energy use, sustainability claims and labeling requirements, responsible sourcing, and the recyclability or recoverability of packaging and products.
Foreign, federal, state, and local governments have enacted, and may in the future focus on enacting, laws and regulations regarding the management of, or disclosure regarding, sustainability matters, such as, among other topics, climate change and the regulation of greenhouse gas ("GHG") emissions, energy use, sustainability claims and labeling requirements, responsible sourcing, and the recyclability or recoverability of packaging and products.
In addition, the United States, United Kingdom, and European Union, among other jurisdictions, have each imposed export controls, as well as financial and economic sanctions, currency controls, and other trade actions, on certain products, technologies, industry sectors, and parties in Russia and Belarus as a result of the Russia-Ukraine war, which have resulted and could further result in retaliatory measures and actions by Russia.
In addition, the United States, United Kingdom, and EU, among other jurisdictions, have each imposed export controls, as well as financial and economic sanctions, currency controls, and other trade actions, on certain products, technologies, industry sectors, and parties in Russia and Belarus as a result of the Russia-Ukraine war, which have resulted and could further result in retaliatory measures and actions by Russia.
Consumers' discretionary purchases of toy and entertainment products are often impacted by a number of factors beyond Mattel's control, including, inflation, job losses, foreclosures, bankruptcies, reduced access to credit, interest rates, tax rates, investment losses, lower consumer confidence, and other macro-economic factors that affect consumer spending behavior.
Consumers' discretionary purchases of toy, entertainment, and digital game products are often impacted by a number of factors beyond Mattel's control including inflation, job losses, foreclosures, bankruptcies, reduced access to credit, interest rates, tax rates, investment losses, lower consumer confidence, tariffs, and other macro-economic factors that affect consumer spending behavior.
There can be no assurance that Mattel will be able to identify suitable acquisition targets or merger partners or that, if identified, it will be able to complete these transactions on terms acceptable to Mattel and to potential acquisition targets or merger partners.
There can be no assurance that Mattel will be able to identify suitable merger partners, acquisition targets, or investments or that, if identified, it will be able to complete these transactions on terms acceptable to Mattel and to potential acquisition or investment targets or merger partners.
Mattel has exposure to security risks similar to those faced by other large companies that have data stored on their information technology systems, such as security breaches, cyber-attacks, and other hacking activities such as denial of service, malware, and ransomware, and is not always successful in preventing attacks or other cyber incidents.
Mattel has exposure to security risks similar to those faced by other large companies that have data stored on their information technology systems, such as security compromises, cyberattacks, and other hacking activities such as denial of service, malware, and ransomware, and is not always successful in preventing attacks or other cyber incidents.
Children's Online Privacy Protection Act of 1998 ("COPPA") regarding privacy, data protection, AI (including automated decision-making) and data security. These laws and regulations are continuously evolving and developing, creating significant uncertainty as privacy and data protection laws may be interpreted and applied differently from country to country and may create inconsistent or conflicting requirements.
Children's Online Privacy Protection Act of 1998 ("COPPA"), or Executive Order 14117 regarding privacy, data protection, AI (including automated decision-making) and data security. These laws and regulations are continuously evolving and developing, creating significant uncertainty as privacy and data protection laws may be interpreted and applied differently from country to country and may create inconsistent or conflicting requirements.
As Mattel introduces more sophisticated technology products, such products tend to have higher design, development, and production costs, follow longer timelines, and require different competencies compared to Mattel's more traditional toys and games.
As Mattel introduces more products incorporating technology, such products tend to have higher design, development, and production costs, follow longer timelines, and require different competencies compared to Mattel's more traditional toys and games.
Compliance with this evolving legislative and regulatory landscape will require management’s time and resources, impose increased costs, and could result in operational disruptions. Further, Mattel’s failure to comply with sustainability-related laws and regulations could lead to government enforcement actions, penalties, litigation, and/or reputational harm.
Compliance with this evolving and sometimes conflicting legislative and regulatory landscape will require management's time and resources, impose increased costs, and could result in operational disruptions. Mattel's failure to comply with sustainability-related laws and regulations could lead to government enforcement actions, penalties, litigation, and/or reputational harm.
Failure to successfully implement new initiatives or meet product introduction schedules can have an adverse effect on Mattel's business, financial condition, and results of operations.
Failure to successfully implement new initiatives or meet product introduction schedules could have an adverse effect on Mattel's business, financial condition, and results of operations.
Significant changes in currency exchange rates or the ability to transfer capital across borders could have an adverse effect on Mattel's business, financial condition, and results of operations. Mattel operates facilities and sells products in numerous countries outside the United States. During 2024, Mattel's International segment net sales were 41% of Mattel's total consolidated net sales.
Significant changes in currency exchange rates or the ability to transfer capital across borders could have an adverse effect on Mattel's business, financial condition, and results of operations. Mattel operates facilities and sells products in numerous countries outside the United States. During 2025, Mattel's International segment net sales were 44% of Mattel's total consolidated net sales.
An increasing portion of Mattel's business may come from new and emerging markets, and growing business in new and emerging markets presents additional challenges. An increasing portion of Mattel's net revenues may come from new and emerging markets, including China and India.
An increasing portion of Mattel's business may come from new or emerging markets, and growing business in these markets presents additional challenges. An increasing portion of Mattel's net revenues may come from new or emerging markets, including China and India.
These or other factors can reduce the amount that consumers spend on the purchase of Mattel's products. Deterioration of global or regional economic conditions have at times adversely affected Mattel's business, financial condition, and results of operations. Unfavorable economic conditions can also impair the ability of those with whom Mattel does business to satisfy their obligations to us.
These or other factors can reduce the amount that consumers spend on the purchase of Mattel's products. Deterioration of global or regional economic conditions has at times adversely affected Mattel's business, financial condition, and results of operations. Unfavorable economic conditions can also impair the ability of those with whom Mattel does business to satisfy their obligations to it.
Their failure to perform as expected or as required by contract, or a cyber-attack on them that disrupts their systems, could result in significant disruptions and costs to Mattel's operations or, in the case of third-party service providers, a penetration of Mattel's systems.
Their failure to perform as expected or as required by contract, or a cyberattack on them that disrupts their systems, could result in significant disruptions and costs to Mattel's operations or, in the case of third-party service providers, a penetration of Mattel's systems.
In addition, the barriers to entry for new participants in the toy industry and entertainment industry are low and the increasing prevalence of digital media has further increased the ability for new participants to enter Mattel's markets, and broadened the array of companies Mattel competes with.
In addition, the barriers to entry for new participants in the toy, entertainment, and digital games industries are low and the increasing prevalence of digital media has further increased the ability for new participants to enter Mattel's markets, and broadened the array of companies Mattel competes with.
Inaccurately anticipating changes and trends in popular culture, media, fashion, or technology can adversely affect Mattel's sales, financial condition, and results of operations.
Inaccurately anticipating changes and trends in popular culture, media, fashion, or technology can adversely affect Mattel's business, financial condition, and results of operations.
Mattel's stock repurchase program could affect the price of its common stock and may be suspended at any time, and there is no guarantee that repurchases under the program, if any, will enhance stockholder value. Mattel has a $1.00 billion stock repurchase program, under which it is currently authorized to repurchase up to $600 million of its common stock.
Mattel's stock repurchase program could affect the price of its common stock and may be suspended at any time, and there is no guarantee that repurchases under the program, if any, will enhance stockholder value. Mattel has a stock repurchase program, under which it is currently authorized to repurchase up to $1.50 billion of its common stock.
In the event of such default, the holders of such indebtedness will have the right to elect to declare all the funds borrowed thereunder to be due and payable, together with accrued and unpaid interest, the lenders under Mattel's revolving credit facility will have the right to elect to terminate their commitments thereunder, cease making further loans, and institute foreclosure proceedings against Mattel's assets, and Mattel could be forced into bankruptcy or liquidation.
In the event of such default, the holders of such indebtedness will have the right to elect to declare all the funds borrowed thereunder to be due and payable, together with accrued and unpaid interest, the lenders under Mattel's revolving credit facility will have the right to elect to terminate their commitments thereunder and cease making further loans, and Mattel could be forced into bankruptcy or liquidation.
The occurrence of war or hostilities between countries or threat of terrorist activities, and the responses to and results of these activities, could adversely impact Mattel, its personnel and facilities, its customers and suppliers, retail and financial markets, and general economic conditions.
In addition, the threat or occurrence of war or hostilities between countries or threat of terrorist activities, including in these 16 countries, and the responses to and results of these activities, could adversely impact Mattel, its personnel and facilities, its customers and suppliers, retail and financial markets, and general economic conditions.
Mattel's efforts to be responsive to climate change, including to reduce its carbon footprint, and other sustainability matters, cannot provide assurance that Mattel will successfully achieve its sustainability goals, that related costs may not be higher than expected, that proposed regulation or deregulation related to climate change and other sustainability matters will not be more aggressive than Mattel's measures and result in higher costs (or require additional resources), or that any investments Mattel makes in furtherance of achieving such goals will meet expectations for all stakeholders or any applicable binding or non- 17 binding standards, any one of which could have an adverse effect on Mattel's financial condition, results of operations, reputation, or stock price.
Mattel cannot provide assurance that it will successfully achieve or maintain its sustainability goals or that related costs may not be higher than expected, that proposed regulation or deregulation related to climate change and other sustainability matters will not be more aggressive than Mattel's measures and result in higher costs (or require additional resources), or that any investments Mattel makes in furtherance of achieving such goals will meet expectations for all stakeholders or any applicable binding or non-binding standards, any one of which could have an adverse effect on Mattel's financial condition, results of operations, reputation, or stock price.
Risks from political instability, civil unrest, the threat or occurrence of war or terrorist activities, and other geopolitical or macro-economic conditions exist in certain of these countries, which could temporarily or permanently damage the manufacturing operations of Mattel or its third-party manufacturers located there.
Risks from political instability, civil unrest, and other geopolitical or macro-economic conditions exist in certain of these countries, which could temporarily or permanently damage the manufacturing operations of Mattel or its third-party manufacturers located there.
For example, Mattel is or may become subject to a variety of laws and regulations such as the European Union's General Data Protection Regulation ("GDPR"), EU Artificial Intelligence Act ("EU AI Act"), China's Personal Information Protection Law ("PIPL"), California's Consumer Privacy Act ("CCPA"), or the U.S.
For example, Mattel is or may become subject to a variety of laws and regulations such as the EU's General Data Protection Regulation ("GDPR"), EU Artificial Intelligence Act, the EU Data Act, China's Personal Information Protection Law ("PIPL"), California's Consumer Privacy Act ("CCPA"), California Privacy Rights Act ("CPRA"), U.S.
From time to time, issues with products lead to product liability, personal injury or property damage claims, recalls, withdrawals, replacements of products, or regulatory or other actions by governmental authorities, which could divert resources, affect business operations, decrease sales, increase costs, and put Mattel at a competitive disadvantage, any of which could have an adverse effect on Mattel's business, financial condition, and results of operations. 22 Mattel has in the past experienced, and may in the future experience, issues with products that lead to product liability, personal injury or property damage claims, recalls, withdrawals, replacements of products, or regulatory actions by governmental authorities.
From time to time, issues with products lead to product liability, personal injury or property damage claims, recalls, withdrawals, replacements of products, or regulatory or other actions by governmental authorities, which could divert resources, affect business operations, decrease sales, increase costs, and put Mattel at a competitive disadvantage, any of which could have an adverse effect on Mattel's business, financial condition, and results of operations.
There can also be no assurance that Mattel will be successful in integrating any acquired company into its overall operations, or that any such acquired company will operate profitably or will not otherwise adversely impact Mattel's results of operations.
There can also be no assurance that Mattel will be successful in realizing the planned benefits from any such investments, mergers, or acquisitions, or integrating any acquired company into its overall operations, or that any such acquired company will operate profitably or will not otherwise adversely impact Mattel's results of operations.
If Mattel's lenders are unable to fund borrowings under their credit commitments or Mattel is unable to borrow, it could adversely affect Mattel's business, financial condition, and results of operations. 24 There is risk that one or more of Mattel's lenders, even those with strong balance sheets and sound lending practices, could fail or refuse to honor their legal commitments and obligations under existing credit commitments, including but not limited to extending credit up to the maximum amount permitted by a credit facility and otherwise accessing capital and/or honoring loan commitments.
There is risk that one or more of Mattel's lenders, even those with strong balance sheets and sound lending practices, could fail or refuse to honor their legal commitments and obligations under existing credit commitments, including but not limited to extending credit up to the maximum amount permitted by a credit facility and otherwise accessing capital and/or honoring loan commitments.
Mattel's operations may be vulnerable to the adverse effects of climate change, which are predicted to increase the frequency and severity of weather events and other natural cycles such as wildfires, heatwaves, storms, floods, and droughts.
Mattel's business is susceptible to financial, operational, and reputational risks associated with the effects of global climate change. Mattel's operations may be vulnerable to the adverse effects of climate change, which are predicted to increase the frequency and severity of weather events and other natural cycles such as wildfires, heatwaves, storms, floods, and droughts.
Political developments, including trade relations, and/or trade actions could adversely impact Mattel, its personnel and facilities, its customers and suppliers, retail and financial markets, and general economic conditions.
Political developments, including in trade relations, and/or trade actions could adversely impact Mattel, its customers or suppliers, and general economic conditions.
The amounts of anticipated cost savings and anticipated expenses related thereto are based on Mattel's current estimates, but they involve risks, uncertainties, assumptions, and other factors that may cause actual results, performance, or achievements to be materially different from those described herein.
Failure to realize the expected cost savings from these cost savings programs could have an adverse effect on Mattel's business, financial condition, and results of operations. 18 The amounts of anticipated cost savings and anticipated expenses related thereto are based on Mattel's current estimates, but they involve risks, uncertainties, assumptions, and other factors that may cause actual results, performance, or achievements to be materially different from those described herein.
These challenges are intensifying due to trends towards shorter life cycles for individual toy products, the phenomenon of children outgrowing traditional toys at younger ages, an increasing use of more sophisticated technology in toys, including machine learning and AI, and an evolving path to purchase.
These challenges are intensifying due to trends towards shorter life cycles for individual toy products, children outgrowing traditional toys at younger ages, an increasing incorporation of more technology in toys, including machine learning and AI, and an evolving path to purchase. Mattel is the owner of a portfolio of iconic brands that are recognized worldwide.
Mattel's business is worldwide in scope, and political instability, civil unrest, the deterioration of the political, economic, or social situation in a country in which Mattel has significant sales or operations, or the breakdown of trade relations between the United States and a foreign country in which Mattel has significant manufacturing facilities or other operations, could adversely affect Mattel's business, financial condition, and results of operations.
Mattel's business is worldwide in scope, and political instability, civil unrest, or the deterioration of the political, economic, or social situation or changes to trade policy or the breakdown of trade relations with the United States in a country in which Mattel has significant manufacturing, operations, or sales, or from which Mattel sources raw materials, components, or finished products could adversely affect Mattel's business, financial condition, and results of operations.
Additionally, any of these types of events could lead to violations of privacy laws, loss of customers, or loss, misappropriation or corruption of confidential information, trade secrets, or data, which could expose Mattel to potential litigation, regulatory actions, sanctions, or other statutory penalties, any or all of which could adversely affect its business and cause it to incur significant losses and remediation costs. 20 If Mattel fails to comply with applicable U.S. and foreign laws related to privacy, data security, AI, and data protection, it could adversely affect Mattel's operating results and financial condition.
Additionally, any of these types of events could lead to violations of privacy or data protection laws, breach of contract allegations, loss of customers, or loss, misappropriation or corruption of confidential information, trade secrets, or data, which could expose Mattel to potential litigation, regulatory actions, sanctions, or other statutory penalties, any or all of which could adversely affect its business and cause it to incur significant losses and remediation costs.
In 2024, Mattel's three largest customers, Walmart, Target, and Amazon, in the aggregate, accounted for approximately 44% of worldwide consolidated net sales (Walmart at $1.17 billion, Target at $0.68 billion, and Amazon at $0.51 billion ) and its ten largest customers, in the aggregate, accounted for approximately 51% of net sales.
In 2025, Mattel's three largest customers, Walmart, Target, and Amazon, in the aggregate, accounted for approximately 42% of worldwide consolidated net sales (Walmart at $1.08 billion, Target at $0.63 billion, and Amazon at $0.52 billion) and its ten largest customers, in the aggregate, accounted for approximately 49% of worldwide consolidated net sales.
Mattel offers a wide range of products for children, fans of all ages, and families that includes, among others, toys for infants, toddlers, and preschoolers, toys for school-aged children, dolls, vehicles, action figures, building sets, games, including digital, puzzles, plush, educational toys, technology-related products, media-driven products, and fashion-related items.
Mattel offers a wide range of products across multiple age groups and consumer segments that include, among others, toys for infants, toddlers, preschoolers, and school-aged children, as well as products targeted towards adult fans and collectors, dolls, vehicles, action figures, building sets, games, including digital, puzzles, plush, educational, and technology-enabled products, media-driven products, and fashion-related items.
Remote or hybrid work environments (including for Mattel's employees, customers, sellers, suppliers, vendors, and other third parties) may amplify these security risks or introduce additional security vulnerabilities. Additionally, the prevalence and increasing sophistication of AI may increase the frequency or efficacy of cyberattacks against Mattel.
Remote or hybrid work environments (including for Mattel's employees, customers, sellers, suppliers, vendors, and other third parties) may amplify these security risks or introduce additional security vulnerabilities.
Mattel depends on key personnel and may not be able to hire, retain, and integrate sufficient qualified personnel to maintain and expand its business. Mattel's future success depends partly on the continued contribution of key executives, designers, and technical, sales, marketing, manufacturing, entertainment, and other personnel.
Mattel's future success depends partly on the continued contribution of key executives, designers, and technical, sales, marketing, manufacturing, entertainment, and other personnel. If Mattel fails to retain, hire, train, and integrate key personnel, Mattel's ability to maintain or expand its business could be harmed. Recruiting and retaining qualified personnel is costly and highly competitive.
Those steps may increase costs and/or decrease profit margins and are not always successful. During periods of increased inflation, such as Mattel is currently facing, Mattel has increased prices of certain products, and may in the future need to increase prices further in order to cover increased costs of goods sold, which may reduce demand for products.
During periods of increased inflation, Mattel has increased prices of certain products, and may in the future need to increase prices further, in order to cover increased costs of goods sold, which may reduce demand for products.
As disclosed in Part II, Item 9A "Controls and Procedures," Mattel determined that there is a material weakness in its internal control over financial reporting and as a result, its disclosure controls and procedures and internal control over financial reporting are not effective as of December 31, 2024.
As disclosed in Part II, Item 9A "Controls and Procedures," Mattel previously determined that there was a material weakness in its internal control over financial reporting, which has been remediated as of December 31, 2025.
Future deterioration of global or regional economic conditions or disruptions in credit markets in the markets in which Mattel operates could potentially have a material adverse effect on Mattel's liquidity and capital resources, including increasing Mattel's cost of capital or its ability to raise additional capital if needed, or otherwise adversely affect Mattel's business, financial condition, and results of operations. 14 In addition to experiencing potentially lower revenues during times of economic difficulty, in an effort to maintain sales during such times, Mattel may need to increase promotional spending or take other steps to encourage retailer and consumer purchases of its products.
Future deterioration of global or regional economic conditions or disruptions in credit markets in the markets in which Mattel operates could potentially have a material adverse effect on Mattel's liquidity and capital resources, including increasing Mattel's cost of capital or its ability to raise additional capital if needed, or otherwise adversely affect Mattel's business, financial condition, and results of operations.
The systems and processes that Mattel has developed to protect personal information and prevent data loss and other security breaches, including systems and processes designed to prevent, detect, and minimize the impact of a security breach at a third-party provider as well as enhancements to the security of Mattel's systems and processes following the July 2020 ransomware attack, do not provide absolute security, and any failure or inadequacy of such systems or processes could have an adverse effect on Mattel's business, financial condition, and results of operations.
There can be no assurance that Mattel will be able to mitigate negative impacts in the event of such attacks or other cyber incidents. 20 The systems and processes that Mattel has developed to protect personal information and prevent data loss and other security compromises, including systems and processes designed to prevent, detect, and minimize the impact of a security compromise at a third-party provider, do not provide absolute security, and any failure or inadequacy of such systems or processes could have an adverse effect on Mattel's business, financial condition, and results of operations.
For more information, see Part II, Item 8 "Financial Statements and Supplementary Data—Note 13 to the Consolidated Financial Statements—Commitments and Contingencies—Litigation." Mattel identified a material weakness in its internal control over financial reporting which, if not remediated appropriately or timely, could affect Mattel's ability to record, process, and report financial information accurately, impair its ability to prepare financial statements, negatively affect investor confidence, and cause reputational harm.
Any material weakness in Mattel's internal control over financial reporting, if not remediated appropriately or timely, could affect Mattel's ability to record, process, and report financial information accurately, impair its ability to prepare financial statements, negatively affect investor confidence, and cause reputational harm.
The risk factors below describe factors, events, or contingencies that could have an adverse effect on Mattel and are not intended as an exhaustive discussion of whether any such factors, events, or contingencies have or have not occurred. Mattel expressly disclaims any obligation to update or revise any forward-looking statements, whether as a result of new developments or otherwise.
The risk factors below reflect Mattel's beliefs and opinions as to factors, events, or contingencies that could have an adverse effect on Mattel and are not intended as an exhaustive discussion of whether any such factors, events, or contingencies have or have not occurred.
If Mattel's sustainability practices do not or are perceived to not meet or align with investor or other stakeholder expectations and standards (which are continually evolving and may disagree with or emphasize different priorities than the ones Mattel chooses to focus on), or if Mattel fails to achieve, is perceived to have failed to achieve or been delayed in achieving, its sustainability goals, it could negatively affect consumer or customer preference for Mattel's products, as well as expose Mattel to reputational harm or litigation.
If Mattel's sustainability practices do not, or are perceived to not, meet or align with investor or other stakeholder expectations and standards (which are continually evolving and sometimes conflicting), or if Mattel fails to achieve, or is perceived to have failed to achieve, its sustainability goals or targets, it could negatively affect consumer or customer preference for Mattel's products and Mattel's ability to retain existing or attract new employees, customers, and business relationships, as well as expose Mattel to business or reputational harm, government enforcement actions, or litigation.
A variety of Mattel's stakeholders, including regulators, investors, advisory firms, rating agencies, and customers, are establishing laws, regulations, expectations, and/or assessments reflecting their varied and evolving expectations on corporate practices, including transparency, due diligence, and reporting related to sustainability matters, such as climate change, plastic use, human rights and/or labor standards, responsible sourcing, the recyclability or recoverability of packaging and products, human capital management, product safety and quality, and other sustainability matters.
A variety of Mattel's stakeholders, including regulators, investors, advisory firms, rating agencies, and customers, are establishing laws, regulations, expectations, and/or assessments reflecting their varied and evolving, and sometimes conflicting, expectations on corporate practices, including transparency, due diligence, and reporting related to sustainability matters.
Current sustainability goals are based on Mattel management's current assumptions related to scientific or technological developments, carbon markets, and other matters that are subject to change in the future and which may be outside of Mattel's control, as well as standards for measuring progress that are still developing and subject to a number of significant risks and uncertainties.
Statements regarding Mattel's current sustainability goals or targets are based on management's current assumptions related to matters that are subject to change in the future and are subject to a number of significant risks and uncertainties, some of which are outside of Mattel's control.
If Mattel is unable to remediate the material weakness, or is otherwise unable to maintain effective internal control over financial reporting or disclosure controls and procedures, Mattel's ability to record, process, and report financial information accurately, and to prepare financial statements within required time periods, could be adversely affected.
If the additional controls and procedures that Mattel has implemented to remediate the material weakness prove to be ineffective or if Mattel identifies other control deficiencies that individually or together constitute a material weakness, Mattel's ability to record, process, and report financial information accurately, and to prepare financial statements within required time periods, could be adversely affected.
Any increased trade barriers or restrictions on global trade imposed by the United States, whether toward China, Russia, or other countries, or further retaliatory trade measures or currency controls taken by China, Russia, or other countries in response, could further adversely affect Mattel's business, financial condition, and results of operations.
Any increased trade barriers or restrictions on global trade imposed by the United States, or further retaliatory trade measures or currency controls taken by other countries in response, could further adversely affect Mattel's business, financial condition, and results of operations. 17 Evolving and sometimes conflicting stakeholder expectations, regulatory requirements, and scrutiny relating to sustainability matters, could expose Mattel to potential liabilities, increase costs, cause reputational harm, and cause other adverse impacts to Mattel's business.
In addition, as Mattel enters into new areas of investment, product development, or other business activities, it will have to learn to navigate the regulatory framework surrounding those areas, which may be continuing to develop. For example, Mattel has launched several non-fungible token projects, and its own digital collectibles marketplace.
In addition, as Mattel enters into new areas of investment, product development, or other business activities, it will have to learn to navigate the regulatory framework surrounding those areas, which may be continuing to develop. The steps Mattel takes to comply with these laws, regulations, and policies do not ensure that Mattel will be in compliance in the future.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeIn addition, Mattel's IT organization has a steering committee comprised of internal privacy and cybersecurity experts, chaired by Mattel's Chief Information Security Officer ("CISO"), which is responsible for the development and maintenance of Mattel's privacy and information security programs and regularly reports to Mattel's Chief Technology Officer ("CTO"). 25 Mattel is subject to cybersecurity threats that could have a material adverse impact on its results of operations, financial condition, and liquidity, as further discussed in Item 1A "Risk Factors" under the headings of Legal and Regulatory.
Biggest changeMattel is subject to cybersecurity threats that could have a material adverse impact on its results of operations, financial condition, and liquidity, as further discussed in Item 1A "Risk Factors" under the heading of Legal and Regulatory.
Mattel's CISO reports to the CTO, regularly communicating risks and other relevant information related to cybersecurity threats and incidents. Mattel's CTO has significant leadership, cybersecurity, and technology experience, is responsible for overseeing the monitoring and mitigation of cybersecurity threats, and advises and consults Mattel's senior management regarding material cybersecurity risks.
Mattel's Head of Cybersecurity reports to the CTO, regularly communicating risks and other relevant information related to cybersecurity threats and incidents. Mattel's CTO has significant leadership, cybersecurity, and technology experience, is responsible for overseeing the monitoring and mitigation of cybersecurity threats, and advises and consults Mattel's senior management regarding material cybersecurity risks.
The CISO provides regular updates to Mattel's CTO regarding critical and major severity security incidents involving Mattel systems, security incidents involving third parties that have the potential to impact Mattel's operations or involve sensitive customer, supplier, consumer, or employee data, and mitigation and remediation implemented to address such threats or incidents.
The Head of Cybersecurity provides regular updates to Mattel's CTO regarding critical and major severity security incidents involving Mattel systems, security incidents involving third parties that have the potential to impact Mattel's operations or involve sensitive customer, supplier, consumer, or employee data, and mitigation and remediation implemented to address such threats or incidents.
A team led by the CISO implements and maintains systems designed to detect and prevent cybersecurity threats, monitors important developments that may present risk to Mattel and third-party systems, and oversees the results of internal and third-party security reviews.
A team led by the Head of Cybersecurity and supported by the Cybersecurity Leadership Team implements and maintains systems designed to detect and prevent cybersecurity threats, monitors important developments that may present risk to Mattel and third-party systems, and oversees the results of internal and third-party security reviews.
Mattel seeks to identify vulnerabilities and mitigate risks from cybersecurity threats posed by its use of third-party technology, information systems, and service providers through oversight by Mattel's information technology ("IT") organization through a variety of processes, including conducting onboarding due diligence, imposing contractual obligations related to privacy and information security, and regularly monitoring the performance of third parties providing critical support systems.
Mattel seeks to identify vulnerabilities and mitigate risks from cybersecurity threats posed by its use of third-party technology, information systems, and service providers through oversight by Mattel's information technology ("IT") organization through a variety of processes, including conducting onboarding due diligence, imposing contractual obligations related to privacy and information security, and regularly monitoring the performance of third parties providing critical support systems. 25 To support incident response preparedness, Mattel has developed a cybersecurity incident response plan and conducts an annual simulated incident exercise.
Governance Mattel's CISO has more than twenty years of cybersecurity industry experience at Mattel and elsewhere and is responsible for coordinating cybersecurity efforts within Mattel, with a focus on cybersecurity threat prevention, detection, and mitigation, as well as enhancement of privacy and security measures, including security updates, security architecture and engineering, and identity access management.
Governance Mattel's Head of Cybersecurity and the other members of the Cybersecurity Leadership Team have collectively more than thirty years of cybersecurity industry experience at Mattel and elsewhere and are responsible for coordinating cybersecurity efforts within Mattel, with a focus on cybersecurity threat prevention, detection, and mitigation, as well as enhancement of security measures, including security updates, security architecture and engineering, and identity access management.
Mattel also utilizes business continuity and disaster recovery plans to prepare for potential disruptions in technology that Mattel relies upon. Further, Mattel monitors novel and advanced cybersecurity threats and provides ongoing employee security awareness training.
The cybersecurity incident response plan addresses cybersecurity incidents that directly impact Mattel or arise from Mattel's use of third-party technology, information systems, and service providers. Mattel also utilizes business continuity and disaster recovery plans to prepare for potential disruptions in technology that Mattel relies upon. Further, Mattel monitors novel and advanced cybersecurity threats and provides ongoing employee security awareness training.
Removed
To support incident response preparedness, Mattel has developed a cybersecurity incident response plan and conducts an annual simulated incident exercise. The cybersecurity incident response plan addresses cybersecurity incidents that directly impact Mattel or arise from Mattel's use of third-party technology, information systems, and service providers.
Added
In addition, Mattel's IT organization has a steering committee comprised of internal cybersecurity experts that are responsible for the development and maintenance of Mattel's information security programs and regularly reports to Mattel's Chief Technology Officer ("CTO").
Added
Mattel's Head of Cybersecurity leads the steering committee with respect to cybersecurity risk management matters and works closely with designated privacy leadership to protect personal information.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeFor all remaining leases that are scheduled to expire within the next twelve months, Mattel may negotiate new lease agreements, renew existing lease agreements, or utilize alternate facilities.
Biggest changeMattel also leases office space and principal manufacturing facilities in China, which support the North America and International segments. 26 For all leases that are scheduled to expire within the next twelve months, Mattel may negotiate new lease agreements, renew existing lease agreements, or utilize alternate facilities.
Mattel maintains leased offices in the United States, in Arkansas, California, and Minnesota, a leased warehouse in Wisconsin, distribution facilities in California, Pennsylvania, Texas, and in Mississauga, Canada, and retail and related office space in Chicago, Illinois; Los Angeles, California; and New York, New York for its flagship American Girl stores, and in four other cities across the United States for its American Girl boutique stores, all of which are used by the North America segment.
Mattel maintains leased offices in the United States, in Arkansas, California, and Minnesota, distribution facilities in California, Pennsylvania, Texas, and in Mississauga, Canada, and retail and related office space in Chicago, Illinois; Los Angeles, California; and New York, New York for its flagship American Girl stores, and in four other cities across the United States for its American Girl boutique stores, all of which are used by the North America segment.
Mattel also leases buildings in El Segundo consisting of approximately 387,000 square feet. All segments use these facilities.
Mattel also leases buildings in El Segundo consisting of approximately 323,000 square feet. All segments use these facilities.
Internationally, Mattel has offices and/or warehouse space in over 30 countries. Mattel leases facilities used by the International segment in various foreign jurisdictions, including China, France, Mexico, and the United Kingdom. Mattel also leases office space and principal manufacturing facilities in China, which support the North America and International segments.
Internationally, Mattel has offices and/or warehouse space in over 30 countries. Mattel leases facilities used by the International segment in various foreign jurisdictions, including China, France, Mexico, and the United Kingdom.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest change(b) On February 5, 2024, the Board of Directors authorized a $1.00 billion share repurchase program. As of December 31, 2024, Mattel had a remaining authorization of $600.0 million under the program. Repurchases under the share repurchase program will take place from time to time, depending on market conditions.
Biggest changeAs of February 20, 2026, Mattel has repurchased 5.9 million shares of its common stock at a cost of $101.0 million under the new $1.50 billion share repurchase program. Repurchases under the program will take place from time to time, depending on market conditions.
Dividends See Part II, Item 8 "Financial Statements and Supplementary Data—Note 7 to the Consolidated Financial Statements —Stockholders' Equity—Dividends." Recent Sales of Unregistered Equity Securities During the fourth quarter of 2024, Mattel did not sell any unregistered equity securities.
Dividends See Part II, Item 8 "Financial Statements and Supplementary Data—Note 7 to the Consolidated Financial Statements —Stockholders' Equity—Dividends." Recent Sales of Unregistered Equity Securities During the fourth quarter of 2025, Mattel did not sell any unregistered equity securities.
Mattel's share repurchase program has no expiration date. 27 Performance Graph The following graph compares the performance of Mattel's common stock with that of the S&P 500 Index and the S&P 500 Consumer Discretionary Index. The Cumulative Total Return listed below assumes an initial investment of $100 on December 31, 2019 and reinvestment of dividends.
Mattel's share repurchase program has no expiration date. 28 Performance Graph The following graph compares the performance of Mattel's common stock with that of the S&P 500 Index and the S&P 500 Consumer Discretionary Index. The Cumulative Total Return listed below assumes an initial investment of $100 on December 31, 2020 and reinvestment of dividends.
Item 5. Market for the Registrant's Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities. Market Information Mattel's common stock, par value $1.00 per share, is traded under the symbol "MAT" on The Nasdaq Global Select Market. Holders of Record As of February 6, 2025, Mattel had approximately 14,000 holders of record of its common stock.
Item 5. Market for the Registrant's Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities. Market Information Mattel's common stock, par value $1.00 per share, is traded under the symbol "MAT" on The Nasdaq Global Select Market. Holders of Record As of February 11, 2026, Mattel had approximately 12,000 holders of record of its common stock.
Issuer Purchases of Equity Securities During 2024, Mattel repurchased 21.0 million shares of its common stock at a cost of $400.0 million. During 2023, Mattel repurchased 10.4 million shares of its common stock at a cost of $203.0 million. During 2022, Mattel did not repurchase any shares of its common stock.
Issuer Purchases of Equity Securities During 2025, Mattel repurchased 31.4 million shares of its common stock at a cost of $600.0 million. During 2024, Mattel repurchased 21.0 million shares of its common stock at a cost of $400.0 million. During 2023, Mattel repurchased 10.4 million shares of its common stock at a cost of $203.0 million.
The following table provides certain information with respect to Mattel's purchases of its common stock during the fourth quarter of 2024: Total Number of Shares Purchased (a) Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (b) (In millions) Period: October 1 - 31 1,122,377 $ 19.66 1,119,197 $ 709.7 November 1 - 30 5,784,466 18.98 5,780,765 600.0 December 1 - 31 1,940 17.79 — 600.0 Total 6,908,783 $ 19.09 6,899,962 $ 600.0 (a) The total number of shares purchased includes 8,821 shares withheld from employees to satisfy minimum tax withholding obligations that occur upon settlement of equity awards, which were not purchased as part of a publicly announced repurchase plan or program.
The following table provides certain information with respect to Mattel's purchases of its common stock during the fourth quarter of 2025: Total Number of Shares Purchased (a) Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (b) (In millions) Period: October 1 - 31 2,802,060 $ 18.93 2,800,285 $ 134.5 November 1 - 30 7,023,231 19.26 6,982,015 — December 1 - 31 2,468 19.93 — — Total 9,827,759 $ 19.17 9,782,300 $ — (a) The total number of shares purchased includes 45,459 shares withheld from employees to satisfy minimum tax withholding obligations that occur upon settlement of equity awards, which were not purchased as part of a publicly announced repurchase plan or program.
December 31, 2019 2020 2021 2022 2023 2024 Cumulative Total Return: Mattel, Inc. $ 100.00 $ 128.78 $ 159.11 $ 131.66 $ 139.34 $ 130.85 S&P 500 $ 100.00 $ 118.39 $ 152.34 $ 124.73 $ 157.48 $ 196.85 S&P 500 Consumer Discretionary $ 100.00 $ 133.30 $ 165.87 $ 104.45 $ 148.63 $ 193.43 28 Item 6. Reserved.
December 31, 2020 2021 2022 2023 2024 2025 Cumulative Total Return: Mattel, Inc. $ 100.00 $ 123.55 $ 102.23 $ 108.19 $ 101.60 $ 113.70 S&P 500 $ 100.00 $ 128.68 $ 105.36 $ 133.03 $ 166.28 $ 195.98 S&P 500 Consumer Discretionary $ 100.00 $ 124.43 $ 78.35 $ 111.50 $ 145.11 $ 153.88 29 Item 6. Reserved.
Added
(b) On February 5, 2024, the Board of Directors authorized a $1.00 billion share repurchase program. As of December 31, 2025, such authorization was exhausted. On February 9, 2026, the Board of Directors authorized a new $1.50 billion share repurchase program.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

98 edited+32 added−29 removed68 unchanged
Biggest changeThe decrease in net sales was due to a decrease in gross billings of $30.6 million, partially offset by a decrease in sales adjustments of $11.3 million. 34 For the Year Ended % Change as Reported Currency Exchange Rate Impact December 31, 2024 December 31, 2023 (In millions, except percentage information) Gross Billings by Categories Dolls $ 920.4 $ 1,026.2 -10 % -1 % Infant, Toddler, and Preschool 368.0 382.2 -4 % -2 % Vehicles 930.5 828.6 12 % -2 % Action Figures, Building Sets, Games, and Other 419.8 432.3 -3 % -1 % Gross Billings $ 2,638.7 $ 2,669.4 -1 % -1 % Supplemental Gross Billings Disclosure Gross Billings by Top 3 Power Brands Barbie $ 615.2 $ 697.4 -12 % -1 % Hot Wheels 833.7 741.6 12 % -2 % Fisher-Price (a) 279.5 276.5 1 % -2 % Other 910.3 953.8 -5 % -1 % Gross Billings $ 2,638.7 $ 2,669.4 -1 % -1 % (a) Beginning in the first quarter of 2024, the Fisher-Price power brand was revised to exclude Baby Gear and Imaginext products.
Biggest changeFor the Year Ended % Change as Reported Currency Exchange Rate Impact December 31, 2025 December 31, 2024 (In millions, except percentage information) Gross Billings by Categories Dolls $ 854.7 $ 920.4 -7 % 2 % Infant, Toddler, and Preschool 323.1 368.0 -12 % 1 % Vehicles 1,100.2 930.5 18 % 2 % Action Figures, Building Sets, Games, and Other 538.8 419.8 28 % 3 % Gross Billings $ 2,816.8 $ 2,638.7 7 % 2 % Supplemental Gross Billings Disclosure Gross Billings by Top 3 Power Brands Barbie $ 553.3 $ 615.2 -10 % 2 % Hot Wheels 989.0 833.7 19 % 2 % Fisher-Price 252.5 279.5 -10 % 1 % Other 1,022.0 910.3 12 % 3 % Gross Billings $ 2,816.8 $ 2,638.7 7 % 2 % Gross billings for the International segment were $2.82 billion in 2025, an increase of $178.1 million, or 7%, as compared to $2.64 billion in 2024, with a favorable impact from changes in currency exchange rates of two percentage points.
Mattel presents changes in gross billings as a metric for comparing its aggregate, categorical, brand, and geographic results to highlight significant trends in Mattel's business.
Mattel presents changes in gross billings as a metric for comparing its aggregate, categorical, brand, and geographic results to highlight significant trends in Mattel's business.
Changes in gross billings are discussed because, while Mattel records the details of sales adjustments in its financial accounting systems at the time of sale, such sales adjustments are generally recorded by customer and not associated with categories, brands, or individual products.
Changes in gross billings are discussed because, while Mattel records the details of sales adjustments in its financial accounting systems at the time of sale, such sales adjustments are generally recorded by customer and not associated with categories, brands, or individual products.
Cash flows from operating activities could be negatively impacted by decreased demand for Mattel's products, which could result from factors such as, but not limited to, adverse economic conditions and changes in public and consumer preferences, or by increased costs associated with manufacturing and distribution of products or shortages in raw materials or component parts.
Cash flows from operating activities could be negatively impacted by decreased demand for Mattel's products, which could result from factors such as, but not limited to, adverse economic conditions and changes in public and consumer preferences, or by increased costs associated with manufacturing and distribution of products, such as tariffs, or shortages in raw materials or component parts.
There is a risk that customers will not pay, or that payment may be delayed, because of bankruptcy, financial difficulty, or other factors beyond the control of Mattel. This could increase Mattel's exposure to losses from bad debts. 40 A small number of customers account for a large share of Mattel's net sales and accounts receivable.
There is a risk that customers will not pay, or that payment may be delayed, because of bankruptcy, financial difficulty, or other factors beyond the control of Mattel. This could increase Mattel's exposure to losses from bad debts. A small number of customers account for a large share of Mattel's net sales and accounts receivable.
Unexpected changes in these factors could result in excess inventory in a particular product line, which would require management to record a valuation adjustment on such inventory. 41 Mattel bases its production schedules for toy products on customer orders and forecasts, taking into account historical trends, results of market research, and current market information.
Unexpected changes in these factors could result in excess inventory in a particular product line, which would require management to record a valuation adjustment on such inventory. Mattel bases its production schedules for toy products on customer orders and forecasts, taking into account historical trends, results of market research, and current market information.
Additionally, Mattel uses a variety of financial arrangements to support the collectability of accounts receivable of customers deemed to be a credit risk, including requiring letters of credit, purchasing various forms of credit insurance with unrelated third parties, or requiring cash in advance of shipment. 37 Mattel sponsors defined benefit pension plans and postretirement benefit plans for its employees.
Additionally, Mattel uses a variety of financial arrangements to support the collectability of accounts receivable of customers deemed to be a credit risk, including requiring letters of credit, purchasing various forms of credit insurance with unrelated third parties, or requiring cash in advance of shipment. Mattel sponsors defined benefit pension plans and postretirement benefit plans for its employees.
Significant changes in the assumptions used in the goodwill impairment tests could materially affect key financial statement line items, including other selling and administrative expenses and goodwill. 42 Goodwill is allocated to reporting units for purposes of evaluating whether goodwill is impaired. Mattel's reporting units are: (i) North America, (ii) International, and (iii) American Girl.
Significant changes in the assumptions used in the goodwill impairment tests could materially affect key financial statement line items, including other selling and administrative expenses and goodwill. Goodwill is allocated to reporting units for purposes of evaluating whether goodwill is impaired. Mattel's reporting units are: (i) North America, (ii) International, and (iii) American Girl.
Additionally, Mattel's ability to issue long-term debt and obtain seasonal financing could be adversely affected by factors such as, but not limited to, global economic crises and tight credit environments, an inability to comply with its debt covenants and its Credit Facility covenants, or deterioration of Mattel's credit ratings.
Additionally, Mattel's ability to issue long-term debt and obtain seasonal financing could be adversely affected by factors such as, but not limited to, global economic crises and tight credit environments, inability to comply with its debt covenants and its Credit Facility covenants, or deterioration of Mattel's credit ratings.
New Accounting Pronouncements See Item 8 "Financial Statements and Supplementary Data—Note 1 to the Consolidated Financial Statements—Summary of Significant Accounting Policies." Non-GAAP Financial Measure To supplement the financial results presented in accordance with GAAP, Mattel presents a non-GAAP financial measure within the meaning of Regulation G promulgated by the SEC.
New Accounting Pronouncements See Item 8 "Financial Statements and Supplementary Data—Note 1 to the Consolidated Financial Statements—Summary of Significant Accounting Policies." 44 Non-GAAP Financial Measure To supplement the financial results presented in accordance with GAAP, Mattel presents a non-GAAP financial measure within the meaning of Regulation G promulgated by the SEC.
Significant changes in the assumptions used to develop the estimate could materially affect key financial statement line items, including cost of sales and inventories. In the toy industry, orders are typically subject to cancellation or change at any time prior to shipment.
Significant changes in the assumptions used to develop the estimate could materially affect key financial statement line items, including cost of sales and inventories. 41 In the toy industry, orders are typically subject to cancellation or change at any time prior to shipment.
Mattel closely monitors its counterparties and takes action, as necessary, to manage its counterparty credit risk. Mattel expects that some of its customers and vendors may experience difficulty in obtaining the liquidity required to buy inventory or raw materials.
Mattel closely monitors its counterparties and takes action, as necessary, to manage its counterparty credit risk. 37 Mattel expects that some of its customers and vendors may experience difficulty in obtaining the liquidity required to buy inventory or raw materials.
Products within the North America segment are sold directly to retailers, including discount and freestanding toy stores, chain stores, department stores, other retail outlets and, to a limited extent, wholesalers, and directly to consumers through Mattel's e-commerce platforms.
Products within the North America segment are sold directly to retailers, including omnichannel retailers, discount and freestanding toy stores, chain stores, department stores, other retail outlets and, to a limited extent, wholesalers, and directly to consumers through Mattel's e-commerce platforms.
There were no events or changes in circumstances subsequent to the third quarter assessment that indicate that the carrying amount of a reporting unit may exceed its fair value as of December 31, 2024. Sales Adjustments Mattel routinely enters into arrangements with its customers to provide sales incentives, support customer promotions, and provide allowances for returns and defective merchandise.
There were no events or changes in circumstances subsequent to the third quarter assessment that indicate that the carrying amount of a reporting unit may exceed its fair value as of December 31, 2025. Sales Adjustments Mattel routinely enters into arrangements with its customers to provide sales incentives, support customer promotions, and provide allowances for returns and defective merchandise.
However, based on Mattel's current business plan and factors known to date, it is expected that existing cash and equivalents, cash flows from operations, availability under the Credit Facility, and access to capital markets, will be sufficient to meet working capital and operating expenditure requirements for the next twelve months and in the long-term.
However, based on Mattel's current business plan and factors known to date, it is expected that existing cash and equivalents, cash flows from operations, availability under the Credit Facility, and access to capital markets, will be sufficient to meet working capital, operating expenditure, and other contractual requirements for the next twelve months and in the long-term.
Mattel has omitted discussion of 2022 results where it would be redundant to the discussion previously included in Part II, Item 7 "Management's Discussion and Analysis of Financial Condition and Results of Operations," of Mattel's Annual Report on Form 10-K for the year ended December 31, 2023.
Mattel has omitted discussion of 2023 results where it would be redundant to the discussion previously included in Part II, Item 7 "Management's Discussion and Analysis of Financial Condition and Results of Operations," of Mattel's Annual Report on Form 10-K for the year ended December 31, 2024.
Advertising and Promotion Expenses Advertising and promotion expenses primarily consist of: (i) media costs, which include the media, planning, and buying fees for television, print, and online advertisements, (ii) non-media costs, which include commercial and website production, merchandising, and promotional costs, (iii) retail advertising costs, which include consumer direct catalogs; and (iv) general advertising costs, which include trade show costs.
Advertising and Promotion Expenses Advertising and promotion expenses primarily consist of: (i) media costs, which include the media, planning, and buying fees for television, print, and digital advertisements, (ii) non-media costs, which include commercial and website production, merchandising, and promotional costs, (iii) retail advertising costs, which include consumer direct catalogs, and (iv) general advertising costs, which include trade show costs.
Mattel intends to utilize its existing cash and cash equivalents, cash flow from operations, and borrowings under the Credit Facility to meet its short-term liquidity needs. At December 31, 2024, Mattel had no outstanding borrowings under the Credit Facility and approximately $9 million in outstanding letters of credit under the Credit Facility.
Mattel intends to utilize its existing cash and cash equivalents, cash flow from operations, and borrowings under the Credit Facility to meet its short-term liquidity needs. At December 31, 2025, Mattel had no outstanding borrowings under the Credit Facility and approximately $9 million in outstanding letters of credit under the Credit Facility.
Although the letters of credit are off-balance sheet, the majority of the obligations to which they relate are reflected as liabilities in the consolidated balance sheets. Outstanding letters of credit totaled approximately $9 million as of December 31, 2024 and 2023.
Although the letters of credit are off-balance sheet, the majority of the obligations to which they relate are reflected as liabilities in the consolidated balance sheets. Outstanding letters of credit totaled approximately $9 million as of December 31, 2025 and 2024.
A hypothetical 1% increase or decrease to the allowance for credit losses as a percentage of accounts receivable would have impacted 2024 and 2023 other selling and administrative expenses by approximately $10 million and $11 million, respectively. Inventories—Obsolescence Reserve Inventories are stated at the lower of cost or net realizable value.
A hypothetical 1% increase or decrease of the allowance for credit losses as a percentage of accounts receivable would have impacted 2025 and 2024 other selling and administrative expenses by approximately $11 million and $10 million, respectively. Inventories—Obsolescence Reserve Inventories are stated at the lower of cost or net realizable value.
A hypothetical 1% increase or decrease to inventory reserves as a percentage of gross inventory at December 31, 2024 and 2023 would have impacted 2024 and 2023 cost of sales by approximately $5 million and $6 million, respectively. Goodwill Mattel tests goodwill for impairment annually or more often if an event or circumstance indicates that an impairment may have occurred.
A hypothetical 1% increase or decrease to obsolescence reserves as a percentage of gross inventory at December 31, 2025 and 2024 would have impacted 2025 and 2024 cost of sales by approximately $6 million and $5 million, respectively. 42 Goodwill Mattel tests goodwill for impairment annually or more often if an event or circumstance indicates that an impairment may have occurred.
Management evaluates the level of Mattel's valuation allowances at least annually, and more frequently if actual operating results differ significantly from forecasted results. Changes in the valuation allowances in 2023 primarily related to changes in assessment of the future realizability of certain deferred tax assets, utilization and expiration of tax attributes, and currency fluctuations.
Management evaluates the level of Mattel's valuation allowances at least annually, and more frequently if actual operating results differ significantly from forecasted results. Changes in the valuation allowances in 2025 primarily related to changes in assessment of the future realizability of certain deferred tax assets and utilization and expiration of tax attributes.
As of December 31, 2024 and 2023, the unrecognized tax benefit balance, inclusive of interest and penalties, and net of U.S. federal tax benefit was $151.7 million and $144.9 million, respectively. In the normal course of business, Mattel is regularly audited by U.S. federal, state, local, and foreign tax authorities.
As of December 31, 2025 and 2024, the unrecognized tax benefit balance, inclusive of interest and penalties, and net of U.S. federal tax benefit was $168.9 million and $151.7 million, respectively. In the normal course of business, Mattel is regularly audited by U.S. federal, state, local, and foreign tax authorities.
The following table summarizes Mattel's allowance for credit losses: December 31, 2024 December 31, 2023 (In millions, except percentage information) Allowance for credit losses $ 8.2 $ 8.8 As a percentage of total accounts receivable 0.8 % 0.8 % Changes in the allowance for credit losses reflect management's assessment of the factors noted above, including changes in current economic trends, business environment, past due accounts, disputed balances with customers, and the financial condition of customers.
The following table summarizes Mattel's allowance for credit losses: December 31, 2025 December 31, 2024 (In millions, except percentage information) Allowance for credit losses $ 17.4 $ 8.2 As a percentage of total accounts receivable 1.6 % 0.8 % Changes in the allowance for credit losses reflect management's assessment of the factors noted above, including changes in current economic trends, business environment, past due accounts, disputed balances with customers, and the financial condition of customers.
As of December 31, 2024, Mattel's three largest customers accounted for approximately 41% of net accounts receivable, and its ten largest customers accounted for approximately 51% of net accounts receivable. Should one or more of Mattel's large customers experience bankruptcy or financial difficulty, the allowance for credit losses may not be sufficient to cover such losses.
As of December 31, 2025, Mattel's three largest customers accounted for approximately 31% of net accounts receivable, and its ten largest customers accounted for approximately 43% of net accounts receivable. Should one or more of Mattel's large customers experience bankruptcy or financial difficulty, the allowance for credit losses may not be sufficient to cover such losses.
As such, Mattel has evaluated its intentions related to its indefinite reinvestment assertion and has recorded a $22.1 million deferred tax liability related to approximately $559 million of foreign earnings that will not be indefinitely reinvested. Current Market Conditions Mattel is exposed to financial market risk resulting from changes in interest and foreign currency exchange rates.
As such, Mattel has evaluated its intentions related to its indefinite reinvestment assertion and has recorded a $13.8 million deferred tax liability related to approximately $701 million of foreign earnings that will not be indefinitely reinvested. Current Market Conditions Mattel is exposed to financial market risk resulting from changes in interest and foreign currency exchange rates.
Seasonal Financing See Item 8 "Financial Statements and Supplementary Data—Note 6 to the Consolidated Financial Statements—Seasonal Financing and Debt." Credit Ratings In 2024, Fitch changed Mattel's credit rating from BB+ to BBB- with a stable outlook, Standard & Poor's changed Mattel's credit rating from BBB- to BBB with a stable outlook, and Moody's maintained Mattel's credit rating of Baa3 with a stable outlook.
Seasonal Financing See Item 8 "Financial Statements and Supplementary Data—Note 6 to the Consolidated Financial Statements—Seasonal Financing and Debt." Credit Ratings In 2025, Fitch maintained Mattel's credit rating of BBB- with a stable outlook, Standard & Poor's maintained Mattel's credit rating of BBB with a stable outlook, and Moody's maintained Mattel's credit rating of Baa3 with a stable outlook.
As of December 31, 2023, Mattel's valuation allowances on its U.S. federal and state deferred tax assets and foreign deferred tax assets were approximately $14 million and $71 million, respectively. Changes in the valuation allowances in 2024 primarily related to changes in assessment of the future realizability of certain deferred tax assets, utilization and expiration of tax attributes.
As of December 31, 2025, Mattel's valuation allowances on its U.S. federal and state deferred tax assets and foreign deferred tax assets were approximately $13 million and $87 million, respectively. Changes in the valuation allowances in 2024 primarily related to changes in assessment of the future realizability of certain deferred tax assets, and utilization and expiration of tax attributes.
Mattel performed a quantitative goodwill impairment assessment as of August 1, 2024, and the resulting calculations indicated that the fair values exceeded the carrying amounts of Mattel's reporting units by 4.2 times, 2.2 times, and 1.8 times for the North America, International, and American Girl reporting units, respectively.
Mattel performed a quantitative goodwill impairment assessment as of August 1, 2025, and the resulting calculations indicated that the fair values exceeded the carrying amounts of Mattel's reporting units by 3.7 times, 2.5 times, and 1.4 times for the North America, International, and American Girl reporting units, respectively.
The allowance for credit losses is also affected by the time at which uncollectable accounts receivable balances are actually written off. For the year ended December 31, 2024, Mattel recorded a charge related to its allowance for credit losses of approximately $3 million, which was recognized as other selling and administrative expense.
The allowance for credit losses is also affected by the time at which uncollectable accounts receivable balances are actually written off. For the year ended December 31, 2025, Mattel recorded a net expense related to its allowance for credit losses of approximately $3 million, which was recognized within other selling and administrative expenses.
Such economic changes may affect the sales of Mattel's products and its corresponding inventory levels, which could potentially impact the valuation of its inventory. At the end of each quarter, management within each business segment, North America and International, performs a detailed review of its inventory on an item-by-item basis.
Such economic changes may affect the sales of Mattel's products and its corresponding inventory levels, which could potentially impact the valuation of its inventory. At the end of each quarter, management within each commercial business segment, North America and International, as well as Mattel's owned and operated manufacturing plants, performs a detailed review of its inventory on an item-by-item basis.
Inventory obsolescence reserves are recorded for damaged, obsolete, excess, and slow-moving inventory. Inventory obsolescence expense is charged to cost of sales and establishes a lower cost basis for the inventory.
Inventory obsolescence reserves are recorded for damaged, obsolete, excess, and slow-moving inventory. Inventory obsolescence expense is recognized in cost of sales and establishes a lower cost basis for the inventory.
As of December 31, 2024, Mattel's valuation allowances on its U.S. federal and state deferred tax assets and foreign deferred tax assets were approximately $12 million and $85 million, respectively. As of December 31, 2024 and 2023, Mattel has recorded net deferred tax assets of $252.5 million and $243.1 million, respectively.
As of December 31, 2024, Mattel's valuation allowances on its U.S. federal and state deferred tax assets and foreign deferred tax assets were approximately $12 million and $85 million, respectively. As of December 31, 2025 and 2024, Mattel has recorded net deferred tax assets of $272.9 million and $252.5 million, respectively.
The decrease in the North America segment gross billings was primarily due to lower billings of Dolls and Infant, Toddler, and Preschool products, partially offset by higher billings of Vehicles and Action Figures, Building Sets, Games, and Other products. 33 Dolls gross billings decreased 6%, due to lower billings of Barbie, which benefited from the Barbie movie in the prior year.
The decrease in the North America segment gross billings was primarily due to lower billings of Infant, Toddler, and Preschool and Dolls products, partially offset by higher billings of Vehicles and Action Figures, Building Sets, Games, and Other products. Dolls gross billings decreased 6%, primarily due to lower billings of Barbie products.
The decrease in the International segment gross billings was due to lower billings of Dolls, Infant, Toddler, and Preschool, and Action Figures, Building Sets, Games, and Other products, partially offset by higher billings of Vehicles products.
The increase in the International segment gross billings was due to higher billings of Vehicles and Action Figures, Building Sets, Games, and Other products, partially offset by lower billings of Dolls and Infant, Toddler, and Preschool products. Dolls gross billings decreased 7%, primarily due to lower billings of Barbie products.
Additionally, sales adjustments may include foreign currency transaction gains and losses from the remeasurement of accounts receivable denominated in currencies that are different from the relevant entity's functional currency. Sales adjustments decreased to $653.7 million in 2024, as compared to $660.6 million in 2023.
Additionally, sales adjustments may include foreign currency transaction gains and losses from the remeasurement of accounts receivable denominated in currencies that are different from the relevant entity's functional currency. Sales adjustments increased to $731.4 million in 2025, as compared to $653.7 million in 2024.
Such obligations may include capital expenditures, debt service, future royalty payments pursuant to licensing agreements, future inventory and service purchases, and required cash contributions and payments related to benefit plans. Of Mattel's $1.39 billion in cash and equivalents at December 31, 2024, $728.1 million was held by foreign subsidiaries, including $48.9 million held in Russia.
Such obligations may include capital expenditures, debt service, future royalty payments pursuant to licensing agreements, future inventory and service purchases, and required cash contributions and payments related to benefit plans. Of Mattel's $1.24 billion in cash and equivalents at December 31, 2025, $686.1 million was held by foreign subsidiaries, including $74.4 million held in Russia.
The following tables provide a summary of Mattel's net sales, segment operating income, and gross billings by categories, along with supplemental information by brand, for the North America segment for 2024 and 2023: For the Year Ended % Change as Reported Currency Exchange Rate Impact December 31, 2024 December 31, 2023 (In millions, except percentage information) Net Sales $ 3,168.1 $ 3,210.4 -1 % — % Segment Operating Income 840.0 787.7 7 % Net sales for the North America segment in 2024 were $3.17 billion, a decrease of $42.4 million, or 1%, as compared to $3.21 billion in 2023.
Segment Results North America Segment The following tables provide a summary of Mattel's net sales, segment income, and gross billings by categories, along with supplemental information by brand, for the North America segment for 2025 and 2024: For the Year Ended % Change as Reported Currency Exchange Rate Impact December 31, 2025 December 31, 2024 (In millions, except percentage information) Net Sales $ 3,001.1 $ 3,168.1 -5 % — % Segment Income 704.7 840.0 -16 % Net sales for the North America segment in 2025 were $3.00 billion, a decrease of $167.0 million, or 5%, as compared to $3.17 billion in 2024.
The following table summarizes Mattel's obsolescence reserve: December 31, 2024 December 31, 2023 (In millions, except percentage information) Obsolescence reserve $ 33.0 $ 46.7 As a percentage of gross inventory 6.2 % 7.5 % For the years ended December 31, 2024 and 2023, Mattel recorded a charge related to its inventory obsolescence reserve of approximately $46 million and $64 million, respectively, which was recognized as cost of sales.
The following table summarizes Mattel's obsolescence reserve: December 31, 2025 December 31, 2024 (In millions, except percentage information) Obsolescence reserve $ 32.1 $ 33.0 As a percentage of gross inventory 5.4 % 6.2 % For the years ended December 31, 2025 and 2024, Mattel recorded an expense related to its inventory obsolescence reserve of approximately $38 million and $46 million, respectively, which was recognized within cost of sales.
Mattel expects to make cash contributions totaling approximately $21 million to its defined benefit pension and postretirement benefit plans in 2025, substantially all of which will be for benefit payments for its under-funded plans. Cash Flow Activities Cash flows provided by operating activities were $800.6 million in 2024, as compared to $869.8 million in 2023.
Mattel expects to make cash contributions totaling approximately $14 million to its defined benefit pension and postretirement benefit plans in 2026, substantially all of which will be for benefit payments for its underfunded plans. Cash Flow Activities Cash flows provided by operating activities were $593.3 million in 2025, as compared to $800.6 million in 2024.
The increase in cash flows used for financing activities was primarily due to $197.0 million of higher share repurchases in 2024 compared to 2023. During 2024, Mattel repurchased 21.0 million shares of its common stock at a cost of $400.0 million. During 2023, Mattel repurchased 10.4 million shares of its common stock at a cost of $203.0 million.
The increase in cash flows used for financing activities was primarily due to $200.0 million of increased share repurchases in 2025 compared to 2024. During 2025, Mattel repurchased 31.4 million shares of its common stock at a cost of $600.0 million. During 2024, Mattel repurchased 21.0 million shares of its common stock at a cost of $400.0 million.
Tax Act, repatriations of foreign earnings generally will not be taxable for U.S. federal income tax purposes, but may be subject to state income tax and/or foreign withholding tax, in addition to any local country distribution requirements.
Mattel has the ability to repatriate foreign earnings, which generally will not be taxable for U.S. federal income tax purposes but may be subject to state income tax and/or foreign withholding tax, in addition to any local country distribution requirements.
Advertising and promotion expenses as a percentage of net sales were relatively flat at 9.4% in 2024, compared to 9.6% in 2023. Other Selling and Administrative Expenses Other selling and administrative expenses were $1.53 billion, or 28.5% of net sales, in 2024, an increase of $35.2 million, as compared to $1.50 billion, or 27.5% of net sales, in 2023.
Advertising and promotion expenses as a percentage of net sales were relatively flat at 9.8% in 2025, as compared to 9.4% in 2024. Other Selling and Administrative Expenses Other selling and administrative expenses were $1.54 billion, or 28.7% of net sales, in 2025, an increase of $4.8 million, as compared to $1.53 billion, or 28.5% of net sales, in 2024.
The costs associated with the OPG program are expected to include the following: Optimizing for Profitable Growth – Actions Estimate of Cost Employee severance $90 to $105 million Other restructuring costs $10 to $20 million Non-cash charges up to $5 million Total estimated severance and other restructuring costs $100 to $130 million Investments $30 to $40 million Total estimated actions $130 to $170 million In connection with the OPG program, Mattel recorded severance and other restructuring costs in the following cost and expense categories within operating income in the consolidated statements of operations: For the Year Ended December 31, 2024 December 31, 2023 (In millions) Cost of sales (a) $ 4.3 $ — Other selling and administrative expenses (b) 44.9 25.3 $ 49.2 $ 25.3 (a) Severance and other restructuring costs recorded within cost of sales in the consolidated statements of operations are included in segment operating income in "Note 14 to the Consolidated Financial Statements—Segment Information." (b) Severance and other restructuring costs recorded within other selling and administrative expenses in the consolidated statements of operations are included in corporate and other expense in "Note 14 to the Consolidated Financial Statements—Segment Information." As of December 31, 2024, Mattel had recorded cumulative severance and other restructuring charges related to the OPG program of approximately $74 million, which included approximately $2 million of non-cash charges.
The costs associated with the OPG program are expected to include the following: Optimizing for Profitable Growth – Actions Estimate of Cost Employee severance $105 to $120 million Other restructuring costs $5 to $10 million Non-cash charges up to $5 million Total estimated severance and other restructuring costs $110 to $135 million Investments $5 to $10 million Total estimated actions $115 to $145 million In connection with the OPG program, Mattel recorded severance and other restructuring costs in the following cost and expense categories within operating income in the consolidated statements of operations: For the Year Ended December 31, 2025 December 31, 2024 (In millions) Cost of sales (a) $ 7.8 $ 4.3 Other selling and administrative expenses (b) 33.5 44.9 $ 41.3 $ 49.2 (a) Severance and other restructuring costs recorded within cost of sales in the consolidated statements of operations are included in segment income in "Note 14 to the Consolidated Financial Statements—Segment Information." (b) Severance and other restructuring costs recorded within other selling and administrative expenses in the consolidated statements of operations are included in unallocated corporate and other operating expenses in "Note 14 to the Consolidated Financial Statements—Segment Information." 36 As of December 31, 2025, in connection with the OPG program, Mattel recorded cumulative severance and other restructuring charges of approximately $116 million, which included approximately $5 million of non-cash charges.
Additionally, in 2024, Mattel recognized a net income tax benefit of $34.8 million related to tax elections filed to amortize certain intangible assets transferred as part of Mattel’s intra-group IP rights transfer and establishment of certain U.S. deferred tax assets, which was offset by higher income tax expense as a result of an increase in income before income taxes.
In 2024, Mattel recognized a net income tax benefit of $34.8 million related to tax elections filed to amortize certain intangible assets transferred as part of Mattel’s intra-group IP rights transfer and establishment of certain U.S. deferred tax assets.
The accounting policies and estimates described below are those Mattel considers most critical in preparing its consolidated financial statements. These accounting policies and estimates include significant judgments made by management using information available at the time the estimates are made. As described below, however, these estimates could change materially if different information or assumptions were used instead.
These accounting policies and estimates include significant judgments made by management using information available at the time the estimates are made. As described below, however, these estimates could change materially if different information or assumptions were used instead.
Mattel realized cumulative cost savings (before severance, restructuring costs, and cost inflation) of approximately $83 million, which represents approximately 60% benefit to cost of sales, and 40% benefit to other selling and administrative expenses, as of December 31, 2024, in connection with the OPG Program.
Mattel realized cumulative cost savings (before severance, restructuring costs, and cost inflation) of approximately $172 million, which represents approximately 60% benefit to cost of sales, and approximately 40% benefit to other selling and administrative expenses as of December 31, 2025.
International Segment The following tables provide a summary of Mattel's net sales, segment operating income, and gross billings by categories, along with supplemental information by brand, for the International segment for 2024 and 2023: For the Year Ended % Change as Reported Currency Exchange Rate Impact December 31, 2024 December 31, 2023 (In millions, except percentage information) Net Sales $ 2,211.5 $ 2,230.8 -1 % -1 % Segment Operating Income 389.0 299.1 30 % Net sales for the International segment in 2024 were $2.21 billion, a decrease of $19.3 million, or 1%, as compared to $2.23 billion in 2023.
International Segment The following tables provide a summary of Mattel's net sales, segment income, and gross billings by categories, along with supplemental information by brand, for the International segment for 2025 and 2024: For the Year Ended % Change as Reported Currency Exchange Rate Impact December 31, 2025 December 31, 2024 (In millions, except percentage information) Net Sales $ 2,346.6 $ 2,211.5 6 % 2 % Segment Income 445.0 389.0 14 % Net sales for the International segment in 2025 were $2.35 billion, an increase of $135.1 million, or 6%, as compared to $2.21 billion in 2024.
The decrease in gross billings was due to lower billings of Dolls and Infant, Toddler, and Preschool products, partially offset by higher billings of Vehicles and Action Figures, Building Sets, Games, and Other products. Dolls gross billings decreased 8%, due to lower billings of Barbie, which benefited from the Barbie movie in the prior year.
The increase in gross billings was due to higher billings of Vehicles and Action Figures, Building Sets, Games, and Other products, partially offset by lower billings of Infant, Toddler, and Preschool and Dolls products. Dolls gross billings decreased 7%, primarily due to lower billings of Barbie products.
The decrease in net sales was primarily due to a decrease in gross billings of $68.6 million. 30 Gross billings represent amounts invoiced to a customer and do not include the impact of sales adjustments, such as trade discounts and other allowances.
The decrease in net sales was primarily due to an increase in sales adjustments of $77.7 million, partially offset by an increase in gross billings of $45.8 million. Gross billings represent amounts invoiced to a customer and do not include the impact of sales adjustments, such as trade discounts and other allowances.
In 2024, Mattel's three largest customers, Walmart, Target, and Amazon, in the aggregate, accounted for approximately 44% of net sales, and its ten largest customers, in the aggregate, accounted for approximately 51% of net sales.
In 2025, Mattel's three largest customers, Walmart, Target, and Amazon, in the aggregate, accounted for approximately 42% of worldwide consolidated net sales, and its ten largest customers, in the aggregate, accounted for approximately 49% of net sales.
For the year ended December 31, 2023, Mattel recorded a benefit related to its allowance for credit losses of approximately $2 million, which was recognized as other selling and administrative income.
For the year ended December 31, 2024, Mattel recorded a net expense related to its allowance for credit losses of approximately $3 million, which was recognized within other selling and administrative expenses.
Infant, Toddler, and Preschool gross billings decreased 5%, primarily due to lower billings of Baby Gear and Power Wheels products of 5%, due to the continued strategic exit from certain product lines in Power Wheels and Baby Gear. Vehicles gross billings increased 9%, due to higher billings of Hot Wheels products.
Infant, Toddler, and Preschool gross billings decreased 21%, of which 9% was due to lower billings of Fisher-Price products, 7% was due to lower billings of Baby Gear and Power Wheels products, due to the continued strategic exit from certain product lines in Baby Gear and Power Wheels , and 5% was due to lower billings of Preschool Entertainment products.
Results of Operations Consolidated Results The following table presents Mattel's consolidated results for 2024 and 2023: For the Year Ended Year/Year Change December 31, 2024 December 31, 2023 Amount % of Net Sales Amount % of Net Sales % Basis Points of Net Sales (In millions, except percentage and basis point information) Net sales $ 5,379.5 $ 5,441.2 -1 % Cost of sales 2,645.5 49.2 % 2,857.5 52.5 % -7 % (330) Gross profit 2,734.1 50.8 % 2,583.7 47.5 % 6 % 330 Advertising and promotion expenses 507.3 9.4 % 524.8 9.6 % -3 % (20) Other selling and administrative expenses 1,532.5 28.5 % 1,497.3 27.5 % 2 % 100 Operating income 694.3 12.9 % 561.7 10.3 % 24 % 260 Interest expense 118.8 2.2 % 123.8 2.3 % -4 % (10) Interest (income) (51.5) -1.0 % (25.2) -0.5 % 104 % (50) Other non-operating expense (income), net 4.5 (2.3) Income before income taxes 622.5 11.6 % 465.4 8.6 % 34 % 300 Provision for income taxes 105.6 269.5 (Income) from equity method investments (24.9) (18.4) Net income $ 541.8 10.1 % $ 214.4 3.9 % 153 % 620 Sales Net sales in 2024 were $5.38 billion, a decrease of $61.7 million, or 1%, as compared to $5.44 billion in 2023.
Results of Operations Consolidated Results The following table presents Mattel's consolidated results for 2025 and 2024: For the Year Ended Year/Year Change December 31, 2025 December 31, 2024 Amount % of Net Sales Amount % of Net Sales % Basis Points of Net Sales (In millions, except percentage and basis point information) Net sales $ 5,347.6 $ 5,379.5 -1 % Cost of sales 2,742.0 51.3 % 2,645.5 49.2 % 4 % 210 Gross profit 2,605.7 48.7 % 2,734.1 50.8 % -5 % (210) Advertising and promotion expenses 522.0 9.8 % 507.3 9.4 % 3 % 40 Other selling and administrative expenses 1,537.2 28.7 % 1,532.5 28.5 % — % 20 Operating income 546.4 10.2 % 694.3 12.9 % -21 % (270) Interest expense 118.7 2.2 % 118.8 2.2 % — % — Interest (income) (45.0) -0.8 % (51.5) -1.0 % -13 % 20 Other non-operating expense, net 13.3 4.5 Income before income taxes 459.5 8.6 % 622.5 11.6 % -26 % (300) Provision for income taxes 89.8 105.6 (Income) from equity method investments (27.9) (24.9) Net income $ 397.6 7.4 % $ 541.8 10.1 % -27 % (270) Sales 31 Net sales in 2025 were $5.35 billion, a decrease of $31.9 million, or 1%, as compared to $5.38 billion in 2024.
Accounts payable and accrued liabilities decreased $30.9 million to $1.28 billion at December 31, 2024, as compared to $1.31 billion at December 31, 2023, primarily due to a decrease of $43.2 million in accounts payable, partially offset by an increase in accrued advertising expense of $18.1 million. 38 A summary of Mattel's capitalization is as follows: December 31, 2024 December 31, 2023 (In millions, except percentage information) Cash and equivalents $ 1,387.9 $ 1,261.4 2010 Senior Notes due October 2040 250.0 250.0 2011 Senior Notes due November 2041 300.0 300.0 2019 Senior Notes due December 2027 600.0 600.0 2021 Senior Notes due April 2026 600.0 600.0 2021 Senior Notes due April 2029 600.0 600.0 Debt issuance costs and debt discount (15.6) (20.0) Total debt 2,334.4 51 % 2,330.0 52 % Stockholders' equity 2,264.1 49 2,149.2 48 Total capitalization (debt plus equity) $ 4,598.5 100 % $ 4,479.2 100 % Total debt was $2.33 billion at December 31, 2024, flat as compared to $2.33 billion at December 31, 2023.
A summary of Mattel's capitalization is as follows: December 31, 2025 December 31, 2024 (In millions, except percentage information) Cash and equivalents $ 1,242.9 $ 1,387.9 2010 Senior Notes due October 2040 250.0 250.0 2011 Senior Notes due November 2041 300.0 300.0 2019 Senior Notes due December 2027 600.0 600.0 2021 Senior Notes due April 2026 — 600.0 2021 Senior Notes due April 2029 600.0 600.0 2025 Senior Notes due November 2030 600.0 — Debt issuance costs and debt discount (18.3) (15.6) Total debt 2,331.7 51 % 2,334.4 51 % Stockholders' equity 2,233.0 49 2,264.1 49 Total capitalization (debt plus equity) $ 4,564.7 100 % $ 4,598.5 100 % Total debt was $2.33 billion at December 31, 2025, flat as compared to $2.33 billion at December 31, 2024.
Stockholders' equity increased $114.9 million to $2.26 billion at December 31, 2024, as compared to $2.15 billion at December 31, 2023, primarily due to net income in 2024 of $541.8 million and the impact of share-based compensation on additional paid-in capital of $79.4 million, partially offset by share repurchases of $400.0 million and other comprehensive loss of $89.5 million.
Stockholders' equity decreased $31.1 million to $2.23 billion at December 31, 2025, as compared to $2.26 billion at December 31, 2024, primarily due to share repurchases of $600.0 million, partially offset by net income in 2025 of $397.6 million, other comprehensive income of $103.9 million, and the impact of share-based compensation on additional paid-in capital of $79.7 million.
Financial Position Mattel's cash and equivalents increased $126.5 million to $1.39 billion at December 31, 2024, as compared to $1.26 billion at December 31, 2023, primarily due to cash flow provided by operating activities of $800.6 million, partially offset by share repurchases of $400.0 million and capital expenditures of $202.6 million.
Financial Position Mattel's cash and equivalents decreased $145.0 million to $1.24 billion at December 31, 2025, as compared to $1.39 billion at December 31, 2024, primarily due to share repurchases of $600.0 million and capital expenditures of $182.0 million, partially offset by cash flow provided by operating activities of $593.3 million.
Products within the International segment are sold directly to retailers and wholesalers in most European, Latin American, and Asian countries, and in Australia and New Zealand, and through agents and distributors in those countries where Mattel has no direct presence.
Products within the International segment are sold directly to retailers and wholesalers in most European, Latin American, and Asian countries, in Australia and New Zealand, and through agents and distributors in those countries where Mattel has no direct presence. 40 The mass-market retail channel periodically experiences shifts in market share among competitors, causing some large retailers to experience liquidity problems.
While certain sales adjustment amounts are readily determinable at year-end and do not require estimates, other sales adjustments, such as discretionary sales adjustments, require significant judgment by management to make these estimates. In making these estimates, management considers all available information, including the overall business environment, historical trends, and information from customers.
While certain sales adjustment amounts are readily determinable at year-end and do not require estimates, other sales adjustments, such as discretionary sales adjustments, require significant judgment by management to make these estimates.
In connection with these actions, Mattel recorded severance charges of $3.4 million within other selling and administrative expenses in the consolidated statement of operations. 36 Income Taxes See Part II, Item 7 "Management's Discussion and Analysis of Financial Condition and Results of Operations—Results of Operations—Provision for Income Taxes." Liquidity and Capital Resources Mattel's primary sources of liquidity are its domestic and foreign cash and equivalents balances, short-term borrowing facilities, including its $1.40 billion in aggregate principal amount of senior unsecured revolving credit facilities (the "Credit Facility"), which on July 15, 2024 replaced the $1.40 billion prior credit facility, and access to capital markets to fund its operations and obligations.
Income Taxes See Part II, Item 7 "Management's Discussion and Analysis of Financial Condition and Results of Operations—Results of Operations—Provision for Income Taxes." Liquidity and Capital Resources Mattel's primary sources of liquidity are its domestic and foreign cash and equivalents balances, driven by cash flows from operating activities, short-term borrowing facilities, including its $1.40 billion in aggregate principal amount of senior unsecured revolving credit facilities (the "Credit Facility"), and access to capital markets to fund its operations and obligations.
Within cost of sales, product and other costs decreased by $203.4 million, or 9%, to $2.08 billion in 2024 from $2.28 billion in 2023. Royalty expense decreased by $5.7 million, or 2%, to $244.1 million in 2024 from $249.8 million in 2023.
Within cost of sales, product and other costs increased by $63.7 million, or 3%, to $2.14 billion in 2025 from $2.08 billion in 2024. Royalty expense increased by $20.5 million, or 8%, to $264.6 million in 2025 from $244.1 million in 2024.
Overview Mattel is a leading global toy and family entertainment company and owner of one of the most iconic brand portfolios in the world. Mattel creates innovative products and experiences that inspire fans, entertain audiences, and develop children through play.
Overview Mattel is a leading global play and family entertainment company and owner of one of the most iconic brand portfolios in the world.
The decrease in net sales was primarily due to a decrease in gross billings of $37.9 million.
The decrease in net sales was primarily due to a decrease in gross billings of $132.4 million and an increase in sales adjustments of $34.6 million.
The unfavorable changes to working capital were partially offset by an increase in net income, excluding the impact of non-cash items. Cash flows used for investing activities were $189.0 million in 2024, as compared to $142.4 million in 2023.
The decrease in cash flows provided by operating activities was primarily due to a decrease in net income, excluding the impact of non-cash items, and an increase in cash used for working capital of $26.8 million. Cash flows used for investing activities were $154.9 million in 2025, as compared to $189.0 million in 2024.
Mattel believes that the disclosure of this non-GAAP financial measure provides useful supplemental information to investors to be able to better evaluate ongoing business performance and certain components of Mattel's results.
Mattel believes that the disclosure of this non-GAAP financial measure provides useful supplemental information to investors to allow them to better evaluate ongoing business performance and certain components of Mattel's results. This measure is not, and should not be viewed as, a substitute for GAAP financial measures and may not be comparable to similarly-titled measures used by other companies.
The following tables provide a summary of Mattel's consolidated gross billings by categories, along with supplemental information by brand, for 2024 and 2023: For the Year Ended % Change as Reported Currency Exchange Rate Impact December 31, 2024 December 31, 2023 (In millions, except percentage information) Gross Billings by Categories Dolls $ 2,200.5 $ 2,394.2 -8 % -1 % Infant, Toddler, and Preschool 951.3 1,000.8 -5 % -1 % Vehicles 1,791.2 1,641.0 9 % -1 % Action Figures, Building Sets, Games, and Other 1,090.4 1,065.8 2 % -1 % Gross Billings $ 6,033.3 $ 6,101.8 -1 % -1 % Supplemental Gross Billings Disclosure Gross Billings by Top 3 Power Brands Barbie $ 1,350.1 $ 1,537.8 -12 % -1 % Hot Wheels 1,575.0 1,432.4 10 % -1 % Fisher-Price (a) 700.8 681.5 3 % -1 % Other 2,407.4 2,450.2 -2 % — % Gross Billings $ 6,033.3 $ 6,101.8 -1 % -1 % (a) Beginning in the first quarter of 2024, the Fisher-Price power brand was revised to exclude Baby Gear and Imaginext products.
The following tables provide a summary of Mattel's consolidated gross billings by categories, along with supplemental information by brand, for 2025 and 2024: For the Year Ended % Change as Reported Currency Exchange Rate Impact December 31, 2025 December 31, 2024 (In millions, except percentage information) Gross Billings by Categories Dolls $ 2,056.1 $ 2,200.5 -7 % 1 % Infant, Toddler, and Preschool 786.3 951.3 -17 % 1 % Vehicles 1,994.6 1,791.2 11 % 1 % Action Figures, Building Sets, Games, and Other 1,242.1 1,090.4 14 % 1 % Gross Billings $ 6,079.1 $ 6,033.3 1 % 1 % Supplemental Gross Billings Disclosure Gross Billings by Top 3 Power Brands Barbie $ 1,204.1 $ 1,350.1 -11 % 1 % Hot Wheels 1,749.7 1,575.0 11 % 1 % Fisher-Price 622.3 700.8 -11 % 1 % Other 2,503.0 2,407.4 4 % 1 % Gross Billings $ 6,079.1 $ 6,033.3 1 % 1 % Gross billings were $6.08 billion in 2025, an increase of $45.8 million, or 1%, as compared to $6.03 billion in 2024, with a favorable impact from changes in currency exchange rates of one percentage point.
Mattel routinely assesses the positive and negative evidence for this realizability, including the evaluation of sustained profitability and three years of cumulative pretax income for each tax jurisdiction. Changes in the valuation allowances in 2023 primarily related to changes in the assessment of the future realizability of certain deferred tax assets, utilization and expiration of tax attributes, and currency fluctuations.
Mattel routinely assesses the positive and negative evidence for this realizability, including the evaluation of sustained profitability and three years of cumulative pretax income for each tax jurisdiction.
For the Year Ended % Change as Reported Currency Exchange Rate Impact December 31, 2024 December 31, 2023 (In millions, except percentage information) Gross Billings by Categories Dolls $ 1,280.1 $ 1,368.0 -6 % — % Infant, Toddler, and Preschool 583.3 618.6 -6 % — % Vehicles 860.6 812.4 6 % — % Action Figures, Building Sets, Games, and Other 670.6 633.5 6 % — % Gross Billings $ 3,394.6 $ 3,432.5 -1 % — % Supplemental Gross Billings Disclosure Gross Billings by Top 3 Power Brands Barbie $ 734.9 $ 840.4 -13 % — % Hot Wheels 741.3 690.8 7 % — % Fisher-Price (a) 421.3 404.9 4 % — % Other 1,497.0 1,496.3 — % — % Gross Billings $ 3,394.6 $ 3,432.5 -1 % — % (a) Beginning in the first quarter of 2024, the Fisher-Price power brand was revised to exclude Baby Gear and Imaginext products.
For the Year Ended % Change as Reported Currency Exchange Rate Impact December 31, 2025 December 31, 2024 (In millions, except percentage information) Gross Billings by Categories Dolls $ 1,201.4 $ 1,280.1 -6 % — % Infant, Toddler, and Preschool 463.2 583.3 -21 % — % Vehicles 894.4 860.6 4 % — % Action Figures, Building Sets, Games, and Other 703.2 670.6 5 % — % Gross Billings $ 3,262.2 $ 3,394.6 -4 % — % Supplemental Gross Billings Disclosure Gross Billings by Top 3 Power Brands Barbie $ 650.8 $ 734.9 -11 % — % Hot Wheels 760.6 741.3 3 % — % Fisher-Price 369.8 421.3 -12 % — % Other 1,481.0 1,497.0 -1 % — % Gross Billings $ 3,262.2 $ 3,394.6 -4 % — % Gross billings for the North America segment were $3.26 billion in 2025, a decrease of $132.4 million, or 4%, as compared to $3.39 billion in 2024.
Freight and logistics expenses decreased by $2.9 million, or 1%, to $324.1 million in 2024 from $327.0 million in 2023. 31 Gross Margin Gross margin increased to 50.8% in 2024 from 47.5% in 2023.
Freight and logistics expenses increased by $12.3 million, or 4%, to $336.4 million in 2025 from $324.1 million in 2024. Gross Margin Gross margin decreased to 48.7% in 2025 from 50.8% in 2024.
Targeted annual gross cost savings from actions associated with the OPG program, which are expected to be completed by 2026, are $200 million. Of the $200 million in targeted annual gross costs savings, approximately 70% is expected to benefit cost of sales and 30% is expected to benefit other selling and administrative expenses.
Targeted annual gross cost savings from actions associated with the OPG program, which are expected to be completed by the end of 2026, were increased from $200 million to $225 million in the fourth quarter of 2025.
Mattel's share repurchase program was first announced on July 21, 2003. On February 5, 2024, the Board of Directors authorized a new $1.00 billion share repurchase program. As of December 31, 2024, Mattel had a remaining authorization of $600.0 million under the program. Repurchases under the program will take place from time to time, depending on market conditions.
Mattel's share repurchase program was first announced on July 21, 2003. On July 17, 2013, the Board of Directors approved a $500.0 million increase to Mattel's share repurchase authorization, which as of December 31, 2023 was exhausted. On February 5, 2024, the Board of Directors authorized a $1.00 billion share repurchase program, which as of December 31, 2025 was exhausted.
Action Figures, Building Sets, Games, and Other gross billings increased 6%, of which 6% was due to higher billings of Action Figures products and 5% was due to higher billings of Games products, partially offset by lower billings of Building Sets products of 2% and lower billings of Other products of 2%.
Action Figures, Building Sets, Games, and Other gross billings increased 14%, of which 18% was due to higher billings of Action Figures products, primarily due to higher billings of Jurassic World and Minecraft products in connection with their theatrical releases in 2025, partially offset by lower billings of Building Sets products of 4%.
Cost of sales decreased by $121.1 million, or 7%, to $1.60 billion in 2024 from $1.72 billion in 2023, primarily due to a decrease in product and other costs of $115.8 million.
Cost of sales decreased by $31.0 million, or 2%, to $1.57 billion in 2025 from $1.60 billion in 2024, primarily due to a decrease in product and other costs of $34.8 million. North America segment income decreased by $135.3 million to $704.7 million in 2025, as compared to $840.0 million in 2024.
Litigation The content of Item 8 "Financial Statements and Supplementary Data—Note 13 to the Consolidated Financial Statements—Commitments and Contingencies—Litigation" is hereby incorporated by reference in this Item 7. Application of Critical Accounting Policies and Estimates Mattel makes certain estimates and assumptions that affect the reported amounts of assets and liabilities and the reported amounts of revenues and expenses.
Subsequent Events See Part II, Item 8 "Financial Statements and Supplementary Data—Note 18 to the Consolidated Financial Statements—Subsequent Events." Litigation The content of Item 8 "Financial Statements and Supplementary Data—Note 13 to the Consolidated Financial Statements—Commitments and Contingencies—Litigation" is hereby incorporated by reference in this Item 7.
A hypothetical 1% increase or decrease in Mattel's sales adjustments as a percentage of net sales during the years ended December 31, 2024 and 2023 would have impacted 2024 and 2023 net sales and accounts receivable by approximately $54 million. 43 Income Taxes Mattel's income tax provision and related income tax assets and liabilities are based on actual and expected future income, U.S. federal and foreign statutory income tax rates, and tax regulations and planning opportunities in the various jurisdictions in which Mattel operates.
Income Taxes Mattel's income tax provision and related income tax assets and liabilities are based on actual and expected future income, U.S. federal and foreign statutory income tax rates, and tax regulations and planning opportunities in the various jurisdictions in which Mattel operates.
Dolls gross billings decreased 10%, of which 8% was due to lower billings of Barbie primarily due to the benefit of the Barbie movie in the prior year. Infant, Toddler, and Preschool gross billings decreased 4%, of which 3% was due to lower billings of Baby Gear and Power Wheels products.
Infant, Toddler, and Preschool gross billings decreased 17%, of which 8% was due to lower billings of Fisher-Price products, 5% was due to lower billings of Baby Gear and Power Wheels products, due to the continued strategic exit from certain product lines in Baby Gear and Power Wheels , and 4% was due to lower billings of Preschool Entertainment products.
This measure is not, and should not be viewed as, a substitute for GAAP financial measures and may not be comparable to similarly-titled measures used by other companies. 44 Currency Exchange Rate Impact The currency exchange rate impact reflects the portion (expressed as a percentage) of changes in Mattel's reported results that are attributable to fluctuations in currency exchange rates.
Currency Exchange Rate Impact The currency exchange rate impact reflects the portion (expressed as a percentage) of changes in Mattel's reported results that are attributable to fluctuations in currency exchange rates.
International segment operating income was $389.0 million in 2024, as compared to $299.1 million in 2023, primarily due to higher gross profit of $75.9 million and lower advertising and promotion expenses of $10.8 million. 35 Cost Savings Programs Optimizing for Profitable Growth On February 7, 2024, Mattel announced the OPG program, a multi-year cost savings program that follows the Optimizing for Growth program (the "OFG program"), which concluded in the fourth quarter of 2023.
Cost Savings Programs Optimizing for Profitable Growth On February 7, 2024, Mattel announced the OPG program, a multi-year cost savings program that follows the Optimizing for Growth program (the "OFG program"), which concluded in the fourth quarter of 2023.
Cost of sales decreased by $95.2 million, or 8%, to $1.14 billion in 2024 from $1.23 billion in 2023, primarily due to a decrease of product and other costs of $92.4 million.
Cost of sales increased by $42.3 million, or 4%, to $1.18 billion in 2025 from $1.14 billion in 2024, primarily due to an increase in royalty expense of $17.1 million and an increase in product and other costs of $13.3 million.
If significant changes in the assumptions used to develop the estimates occur, they could impact Mattel's results of operations or financial condition.
Sales adjustments for such programs totaled $731.4 million or 13.7% as a percentage of net sales in 2025 and $653.7 million or 12.2% as a percentage of net sales in 2024. If significant changes in the assumptions used to develop the estimates occur, they could impact Mattel's results of operations or financial condition.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeBuy Sell Contract Amount Weighted-Average Contract Rate Fair Value Contract Amount Weighted-Average Contract Rate Fair Value (In thousands of U.S. dollars, except for rates) Australian dollar (a) $ — — $ — $ 81,286 0.65 $ 3,876 British pound sterling (a) 20,939 1.27 (307) — — — Canadian dollar (a) — — — 54,643 0.73 2,179 Czech koruna 4,559 23.87 (83) — — — Euro (a) — — — 276,626 1.10 14,397 Hungarian forint 5,553 390.29 (97) — — — Indonesia rupiah 56,496 16,409.72 501 — — — Japanese yen — — — 7,747 153.06 205 Mexican peso — — — 21,074 20.12 751 Polish zloty 24,439 4.07 (356) — — — South African rand — — — 1,497 18.18 61 Swiss franc 3,543 0.89 (58) — — — $ 115,529 $ (400) $ 442,873 $ 21,469 (a) The weighted-average contract rate for these contracts is quoted in U.S. dollar per local currency.
Biggest changeBuy Sell Contract Amount Weighted-Average Contract Rate Fair Value Contract Amount Weighted-Average Contract Rate Fair Value (In thousands of U.S. dollars, except for rates) Australian dollar (a) $ — — $ — $ 95,816 0.66 $ (1,523) British pound sterling (a) 28,137 1.34 134 — — — Canadian dollar (a) — — — 53,008 0.73 (281) Czech koruna 5,301 20.61 21 — — — Euro (a) — — — 307,963 1.14 (12,016) Hungarian forint 6,881 327.67 18 — — — Indonesia rupiah 42,098 16,695.10 (73) — — — Japanese yen — — — 10,567 154.14 168 Mexican peso — — — 56,918 18.71 (1,657) Polish zloty 33,714 3.58 (20) — — — South African rand — — — 1,103 16.77 (12) Swiss franc 3,452 0.79 4 — — — $ 119,583 $ 84 $ 525,375 $ (15,321) (a) The weighted-average contract rate for these contracts is quoted in U.S. dollar per local currency.
Mattel seeks to mitigate its foreign currency exchange risk by monitoring its foreign currency transaction exposure for the year and partially hedging such exposure using foreign currency forward exchange contracts primarily to hedge its purchase and sale of inventory and other intercompany transactions denominated in foreign currencies. These contracts generally have maturity dates of up to 24 months.
Mattel seeks to mitigate its exposure to foreign currency exchange risk by monitoring its foreign currency transaction exposure for the year and partially hedging such exposure using foreign currency forward exchange contracts primarily to hedge its purchase and sale of inventory and other intercompany transactions denominated in foreign currencies. These contracts generally have maturity dates of up to 24 months.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk. Foreign Currency Exchange Rate Risk Currency exchange rate fluctuations impact Mattel's results of operations and cash flows. The Euro and Chinese yuan were the primary currencies that caused foreign currency transaction exposure for Mattel in 2024.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk. Foreign Currency Exchange Rate Risk Currency exchange rate fluctuations impact Mattel's results of operations and cash flows. The Hong Kong dollar, Euro, and Chinese yuan were the primary currencies that caused foreign currency transaction exposure for Mattel in 2025.
Transaction gains or losses on hedged intercompany inventory transactions are recorded in the consolidated statements of operations in the period in which the inventory is sold to customers. In addition, Mattel manages its exposure to currency exchange rate fluctuations through the selection of currencies used for international borrowings. Mattel does not trade in financial instruments for speculative purposes.
Transaction gains or losses on hedged intercompany inventory transactions are recorded in the consolidated statements of operations in the period in which the inventory is sold to customers. In addition, Mattel manages its exposure to currency exchange rate fluctuations through the selection of currencies used for international borrowings.
Had Mattel not entered into hedges to limit the effect of currency exchange rate fluctuations on its results of operations and cash flows, its earnings before income taxes would have decreased by approximately $30 million in each of 2024 and 2023.
If Mattel had not entered into hedges to limit the effect of currency exchange rate fluctuations on its results of operations and cash flows, its earnings before income taxes would have increased by approximately $10 million in 2025 and decreased by approximately $30 million in 2024. 46
For the purchase of foreign currencies, fair value reflects the amount, based on dealer quotes, that Mattel would pay at maturity for contracts involving the same notional amounts, currencies, and maturity dates, if they had been entered into as of December 31, 2024.
For foreign currency buy and sell contracts, fair value reflects the amount, based on dealer quotes, that Mattel would pay or receive at maturity for contracts involving the same notional amounts, currencies, and maturity dates, if they had been entered into as of December 31, 2025.
Mattel's financial position is also impacted by currency exchange rate fluctuations on translation of its net investments in subsidiaries with non-U.S. dollar functional currencies. Assets and liabilities of subsidiaries with non-U.S. dollar functional currencies are translated into U.S. dollars at period-end exchange rates. Income, expense, and cash flow items are translated at weighted-average exchange rates prevailing during the period.
Mattel does not trade in financial instruments for speculative purposes. 45 Mattel's financial position is also impacted by currency exchange rate fluctuations on translation of its net investments in subsidiaries with non-U.S. dollar functional currencies. Assets and liabilities of subsidiaries with non-U.S. dollar functional currencies are translated into U.S. dollars at fiscal period-end exchange rates.
However, assuming that such factors were held constant, Mattel estimates that a one percent change in the U.S. dollar would have impacted Mattel's 2024 net sales by approximately 0.4% and would have less than a $0.01 impact to Mattel's net income per share. 45 Mattel's foreign currency forward e xchange contracts that were used to hedge firm commitments and anticipated transactions as of December 31, 2024 are shown below.
However, assuming that such factors were held constant, Mattel estimates that a one percent change in the U.S. dollar would have impacted Mattel's 2025 net sales by approximately 0.4% and would have less than a $0.01 impact to Mattel's net income per share.
As of December 31, 2024, these contracts had a contract amount of $69.0 million and a fair value liability of $1.4 million.
As of December 31, 2025, these contracts had a contract amount of $10.3 million and a fair value of $0.2 million.
The resulting currency translation adjustments are recorded as a component of accumulated other comprehensive loss within stockholders' equity. Mattel's primary currency translation adjustments in 2024 were related to its net investments in entities having functional currencies denominated in the Mexican peso, Russian ruble, and Brazilian real.
Mattel's primary currency translation adjustments in 2025 were related to its net investments in entities having functional currencies denominated in the Russian ruble, Mexican peso, and British pound sterling.
All contracts in the following table are against the U.S. dollar and are maintained by reporting units with a U.S. dollar functional currency.
Mattel's foreign currency forward e xchange contracts that were used to hedge firm commitments and anticipated transactions as of December 31, 2025 are shown below. All contracts in the following table are against the U.S. dollar and are maintained by reporting units with a U.S. dollar functional currency.
Removed
For the sale of foreign currencies, fair value reflects the amount, based on dealer quotes, that Mattel would receive at maturity for contracts involving the same notional amounts, currencies, and maturity dates, if they had been entered into as of December 31, 2024.
Added
Income, expense, and cash flow items are translated at weighted-average exchange rates prevailing during the fiscal period. The resulting currency translation adjustments are recorded as a component of accumulated other comprehensive loss within stockholders' equity.
Removed
Turkey Operations Effective April 1, 2022, Mattel has accounted for Turkey as a highly inflationary economy, as the projected three-year cumulative inflation rate exceeded 100%. As such, beginning April 1, 2022, Mattel's Turkey subsidiary has designated the U.S. dollar as its functional currency.
Removed
Mattel's Turkey subsidiary represented approximately 1% of Mattel's consolidated net sales for the year ended December 31, 2024. 46

Other MAT 10-K year-over-year comparisons