Q2 2026 Toy Co Earnings Roundup: What the Numbers Mean for the Toy & Game Business
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Q2 2026 Toy Co Earnings Roundup: What the Numbers Mean for the Toy & Game Business
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Q2 2026 Earnings Deep Dive: What the Results Reveal About the Toy & Game Business
The second-quarter 2026 earnings season for the major toy and game companies confirmed a clear bifurcation in the industry. Demand remains healthy but highly selective, concentrated in collectibles, licensed entertainment properties, vehicles, action figures and especially tabletop and digital gaming. Traditional dolls and preschool categories continue to lag. At the same time, tariffs, input-cost inflation, elevated marketing spend and strategic investments are compressing margins even as top-line growth materialises. Most companies either reaffirmed or raised full-year guidance, signalling confidence that the second half — historically the industry’s strongest period — will deliver improved profitability.
Below is a more detailed examination of the results from Mattel, Hasbro, Spin Master, Jakks Pacific and Funko, followed by what the collective picture means for the remainder of 2026.
Mattel
Strong Top Line, Margin Pressure, Strategic Progress
Mattel reported net sales of $1.125 billion, up 10% as reported and 9% in constant currency. Growth was broad-based geographically: North America rose 12%, EMEA 7% and Asia Pacific 4%, while Latin America was flat. Category performance told a familiar story. Vehicles (led by Hot Wheels, up roughly 12%) and the Action Figures, Building Sets, Games and Other segment (up more than 30%) drove the majority of the gain. Dolls and Infant, Toddler & Preschool declined.
Gross margin fell 270 basis points to 48.2% (adjusted 48.6%). Management quantified the pressures: approximately 170 basis points from tariffs, 120 from inflation, 110 from higher royalties and 60 from FX, partially offset by contributions from the newly consolidated Mattel163 digital-games business and cost-savings programmes. Adjusted operating income dropped to $39 million from $96 million a year earlier, and adjusted EPS was just $0.01 versus $0.21.
CEO Ynon Kreiz emphasised continued execution of the multi-year strategy to build an IP-driven play and family-entertainment business. Proof points included the global release of the Masters of the Universe movie (which became the No. 1 film on Prime Video and the most-watched movie across U.S. streaming in its first week), the launch of Mattel’s first self-published mobile game, and progress integrating Mattel163. The company was again ranked No. 1 globally in dolls, vehicles and infant/toddler/preschool by Circana data and gained share in action figures.
Mattel reiterated full-year 2026 guidance of 3–6% constant-currency net sales growth, adjusted gross margin of approximately 50%, adjusted operating income of $580–630 million and adjusted EPS of $1.27–1.39. Management also reaffirmed its $400 million share-repurchase target for the year (having already bought back $300 million year-to-date). Looking further ahead, executives pointed to 2027 as a stronger year, with mid- to high-single-digit revenue growth and strong double-digit profit growth expected as investments in content, digital games and brand initiatives mature.
Hasbro
The Gaming Powerhouse and Guidance Raise
Hasbro delivered the strongest relative performance of the group. Revenue rose 16% to $1.140 billion, driven by a 27% increase in Wizards of the Coast & Digital Gaming and a 5% rise in Consumer Products. Entertainment declined 20%. Magic: The Gathering had a standout quarter, eclipsing $500 million in quarterly revenue for the first time in its history, powered by the Secrets of Strixhaven and Marvel Super Heroes sets. CEO Chris Cocks described Magic as a “mega franchise” comparable to Pokémon or major gaming titles, noting its long-term compounding growth.
Adjusted operating profit increased 14% to $282 million despite a $56 million non-cash impairment related to the cancellation of certain digital-games projects planned for 2028 and beyond. Adjusted EPS was $1.28. The company returned $133 million to shareholders via dividends and buybacks and repaid $55 million of debt.
On the strength of the first-half results, Hasbro raised full-year guidance: constant-currency revenue growth of 5–7% (previously 3–5%), adjusted operating margin of 25–26% and adjusted EBITDA of $1.45–1.50 billion. Management highlighted continued momentum in Magic, solid performance from Star Wars, Marvel, Peppa Pig and Hasbro Gaming, and a more focused digital investment strategy.
Spin Master
Return to Profitability and Movie Momentum
Spin Master reported revenue of $436.4 million, up 8.9% (8.3% constant currency). Toy revenue grew approximately 12%, helped by roughly $40 million of orders pulled forward from the third quarter as retailers prepared for PAW Patrol: The Dino Movie. Core brands including PAW Patrol, Monster Jam and GUND performed well, alongside newer lines such as 4D Crystal Links and Cool Maker.
The company swung to an operating profit and delivered adjusted EBITDA of $51.6 million (margin 11.8% versus 7.2% a year earlier). The improvement reflected higher gross profit, lower marketing spend (timing-related) and approximately $38 million in tariff refunds. Adjusted net income was $8.6 million, or $0.08 per diluted share.
CEO Christina Miller described the quarter as a return to profitable growth and reiterated the full-year outlook of stable to low-single-digit revenue growth and mid- to upper-single-digit adjusted EBITDA growth. Management noted that the second half is typically weighted more heavily (last year it represented 64% of full-year revenue) and that innovation in collectibles and trading cards remains a priority.
Jakks Pacific
Rebound and International Strength
Jakks Pacific posted net sales of $139.2 million, up 17% year-over-year — a recovery from the prior-year period when sudden tariff implementation had sharply reduced orders. Toys/Consumer Products rose 21% to $97.5 million, led by Action Play & Collectibles (notably Super Mario and other Nintendo properties). Costumes grew 8%. North America sales increased 20% in the quarter; international sales reached their highest first-half level in more than a decade.
Gross margin held relatively steady at 32.3%. The company reported net income of $5.9 million ($0.49 diluted EPS), aided by tariff refunds recorded in non-operating income. Adjusted EPS was $0.25 and adjusted EBITDA improved to $5.4 million. Cash stood at $60.6 million and inventory declined year-over-year, reflecting better working-capital management.
Chairman and CEO Stephen Berman said the year is developing as planned and that the company is well positioned for the second half, with continued focus on content-led products and international expansion.
Funko
Strong Sales, Record Margins and Raised Guidance
Funko reported second-quarter net sales of $207.7 million, up 7% year-over-year, driven by 9% growth in Core Collectibles and 19% growth in Europe. Gross margin reached a record 56.6%, which included a $25.4 million pre-tax benefit from the recognition of expected tariff refunds and the release of accrued tariffs (44.4% excluding the benefit).
Net income was $15.4 million, or $0.27 per diluted share, compared with a substantial loss a year earlier. Adjusted EBITDA came in at $40.9 million (approximately $15 million excluding the tariff-related benefit), well above the company’s prior guidance range of $5–10 million for the quarter. The company used proceeds from the sale of certain tariff claims to reduce debt by $15 million.
Funko reiterated its full-year net sales outlook of flat to up 3% and raised its adjusted EBITDA guidance to $100–110 million (from the previous $70–80 million range), incorporating the second-quarter tariff benefit plus underlying profitability improvement. Core Pop! collectibles continued to show resilience, supported by strong entertainment properties, while the company maintained focus on higher-productivity SKUs and cost discipline.
Cross-Cutting Themes for the Industry Several consistent patterns emerge across the results:
Demand is polarised. High-engagement, fandom-driven and gaming categories are thriving. More traditional play patterns (classic dolls, preschool) remain under pressure.
Margins are the key battleground. Tariff costs, inflation and higher marketing/royalty spend are the primary headwinds. Companies with favourable mix (gaming, collectibles) or one-time benefits (tariff refunds) are navigating the pressure more successfully.
Entertainment and digital remain strategic priorities. Mattel’s film and mobile-games progress, Hasbro’s Magic dominance, Spin Master’s movie pull-forward, Jakks’ licensed content and Funko’s collectibles strength all underline the industry’s shift toward IP-centric, multi-platform franchises.
Retailer behaviour is constructive. Order pull-forwards and improved inventory discipline suggest retailers are stocking more confidently for the holiday period than in the recent past.
Capital returns and balance-sheet strength matter. Share buybacks, dividends and debt reduction remain prominent, particularly at Mattel and Hasbro (with Funko also prioritising debt paydown).
Outlook for the Global Toy & Game business for the remainder of 2026
Most management teams expressed confidence that the second half will be stronger. Holiday demand is expected to benefit from a solid entertainment slate (PAW Patrol, Super Mario, additional Magic sets, Spiderman and other licensed properties). Margin recovery is anticipated as cost actions take hold, tariff impacts are better managed and higher-margin mix continues.
Key risks include further tariff volatility, any softening in consumer discretionary spending, and the precise timing of major entertainment releases. Opportunities lie in the continued expansion of the adult/kidult consumer, the structural growth of tabletop and digital gaming, and the ability of companies with strong IP portfolios to monetise across toys, collectibles, games and content.
Overall, Q2 2026 results portray an industry that is growing selectively and investing for the longer term. Companies with diversified IP, meaningful gaming or collectibles exposure and agile supply chains are best placed to convert current momentum into improved profitability as the sector enters its most important selling season. The second half of 2026 will be the real test of whether margin pressure can be overcome while demand remains constructive.
Analysis based on company earnings releases, SEC filings, earnings-call summaries and related commentary available as of early August 2026. Figures are as reported or adjusted by the respective companies. Market conditions can change rapidly.
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