Mattel, Inc.

Thank you for standing by. My name is Kate and I will be your conference operator today. At this time, I would like to welcome everyone to Mattel Inc. second quarter 2025 earnings conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, press star 1 again. Thank you. I would now like to turn the call over to Jen Kittnick, VP of Investor Relations at Mattel. Please go ahead.

Thank you, Operator, and good afternoon, everyone. Joining me today are Inan Kraiz, Mattel's Chairman and Chief Executive Officer, and Paul Rue, Mattel's Chief Financial Officer. As you know, this afternoon we reported Mattel's second quarter 2025 financial results. We will begin today's call with Inan and Paul providing commentary on our results, after which we will provide some time for questions. Please note that during the question and answer session, we respectfully ask that you limit to one question and one follow-up so that we can get to as many analysts and questions as possible today. Today's discussion earnings release, and slide presentation may reference certain non-GAAP financial measures and key performance indicators, which are defined in the slide presentation and earnings release appendices. Please note that gross billings figures referenced on this call will be stated in constant currency unless stated otherwise. Our earnings release, slide presentation, and supplemental non-GAAP information can be accessed through the Investors section of our corporate website, corporate.matel.com. and the information required by Regulation G regarding non-GAAP financial measures, as well as information regarding our key performance indicators, is included in those documents. The preliminary financial results included in the earnings release and slide presentation represent the most current information available to management. The company's actual results when disclosed in its Form 10-Q may differ as a result of the completion of the company's financial closing procedures, final adjustments, completion of the review by the company's independent registered public accounting firm, and other developments that may arise between now and the disclosure of the final results. Before we begin, I'd like to caution you that certain statements made during the call are forward-looking, including statements related to the future performance of our business, brands, categories, and product lines. Any statements we make about the future are, by their nature, uncertain. These statements are based on currently available information and assumptions, and they are subject to a number of significant risks and uncertainties that could cause our actual results to differ from those projected in the forward-looking statements. We describe some of these uncertainties in the risk factors section of our latest Form 10-K Annual Report, our latest Form 10-Q Quarterly Report, our most recent earnings release and slide presentation, and other filings we make with the SEC from time to time, as well as in other public statements. Mattel does not update forward-looking statements and expressly disclaims any obligation to do so, except as required by law. Now, I'd like to turn the call over to Inan.

Thank you for joining Mattel's second quarter 2025 earnings call. We continued to execute our strategy and demonstrate operational excellence, achieving strong international growth and expanding adjusted gross margin while our U.S. business was impacted by global trade dynamics in timing shifts in retailer ordering patterns. Looking at key financial metrics for the second quarter as compared to the prior year, net sales declined 6% as reported, and in constant currency. Adjusted gross margin increased by 200 basis points, and adjusted earnings per share was the same as last year at 19 cents. We also strengthened our balance sheet and bought back more shares. Despite ongoing trade uncertainty in the U.S., Mattel's POS was up in all regions in the second quarter and first half of the year. With better visibility, we're resuming guidance and providing a revised outlook for 2025, which factors in the tariffs that have been announced to date. We are confident in the appeal of our brands and our ability to manage through global trade dynamics while strengthening our long-term competitive position. Looking at the industry and consumer demand, The global toy industry grew year-to-date through June per CERCANA, and we expect this trend to continue. Consumer engagement is positive overall year-to-date. In terms of our category performance, here are some key highlights and updates from the quarter. Action Figures was a strong growth driver, supported by new tentpole movie properties such as Jurassic and Minecraft, as well as evergreen strength across key properties, including WWE. Vehicles continued its exceptional trajectory with double-digit growth, driven by outstanding performance from Hot Wheels. In games, Uno, the number one card game and traditional game property per Circana, also grew, and is more culturally relevant than it has ever been. Just last week, we launched the Uno Social Club in Las Vegas, creating an innovative live experience for fans through our iconic card game. Dolls declined primarily due to fewer new Barbie product launches and lower associated retailer promotional support versus the prior year. as well as a makeshift from direct import to domestic shipping. Barbie continues to resonate globally, and we couldn't be more confident about the strength of the brand. Barbie is the number one doll in the industry and stands among the most recognized and beloved franchises in the world. We look forward to introducing new product innovation, partnerships, and activations later this year. American Girl grew, driven by personalized consumer experiences at retail. Infant, toddler, and preschool declined due to a decrease in fisher price, as well as the planned exits of certain product lines in baby gear and power wheels. Fisher prices performance in the U.S. was disproportionately affected by trade-related uncertainty, and we expect trends to improve in the balance of the year. Our portfolio is well positioned to meet demand across a range of price points and play patterns. At Mattel, our mission is to create innovative products and experiences designed to inspire fans, entertain audiences, and develop children through play. We recently announced a strategic collaboration with OpenAI. AI has the power to expand on our mission and broaden the reach of our brands in new and exciting ways. Mattel's work with OpenAI will enable us to leverage new technologies to solidify our leadership in innovation and reimagine new forms of play. We plan to share more later this year. We are advancing our entertainment strategy and recently announced the formation of Mattel Studios, bringing together our film and television units. Our vision for Mattel Studios is to collaborate with leading creators to make standout quality content based on Mattel's iconic brands that will resonate in culture and appeal to global audiences. We are scaling our pipeline towards our goal of releasing one to two films per year, starting in 2026 with Masters of the Universe and Matchbox, which are both in post-production and expected to be released in June and fall of 2026, respectively. We also recently made several announcements across our exciting movie slate in partnership with major studios and leading Hollywood talent. Chris Meladandri's Illumination will develop the Barbie animated film for global theatrical release by Universal Pictures. Chris is one of the most successful animated filmmakers in the world, with three of the top ten animated films of all time, the Super Mario Brothers movie, Minions, and Despicable Me 3. Barbie is more than a doll. She is a pop culture icon that transcends generations. Chris is more than a filmmaker. He is a visionary storyteller with an extraordinary sense of character and the human spirit. We look forward to creating animated film history together and further strengthening Barbie's standing at the forefront of current culture. The Hot Wheels live-action movie will be directed by John M. Chu, the acclaimed filmmaker who directed Wicked, In the Heights, and Crazy Rich Asians. This movie is being produced by J.J. Abrams' Bad Robot at Warner Bros. Monster High will be directed by Gerard Johnstone, the filmmaker behind the horror film Megan, and a whack-a-mole hybrid live-action animated feature film based on Mattel's classic game will be developed by TriStar Pictures. In digital games, we are on track to release our first self-published game in 2026 with other titles in the making, and we are also expanding our partnership with Netflix beyond content into digital games with more details to be announced later this year. We are also making progress across television, location-based entertainment, consumer products, and other verticals as part of our broader entertainment strategy to capture the full value of our IP. Our second quarter performance reflects operational excellence in the current microeconomic environment as we continue to execute our strategy to grow Mattel's IP-driven toy business and expand our entertainment offering. We achieved meaningful gross margin expansion, grew internationally, and further progressed our entertainment slate. We are embracing technology and collaborating with world-class partners to bring our iconic brands to life in new ways to position Mattel for long-term success. Now, I would like to turn the call over to Paul Roux, our Chief Financial Officer, and welcome him to his first Mattel earnings call. Paul, over to you to discuss our results and outlook in more detail.