Aug 4 (Reuters) - Mattel on Tuesday topped analysts' estimates for second-quarter revenue and reaffirmed its annual forecasts, but profit fell short as tariff-related costs squeezed the toymaker's margins.
Quarterly revenue was lifted by resilient demand and its expanding entertainment portfolio, including films such as "Masters of the Universe" and "Matchbox".
"We continued to execute our multi-year strategy to grow our IP-driven play and family entertainment business in the second quarter with strong
growth in net sales," said CEO Ynon Kreiz.
Shares of the company rose about 2% in after-market trading.
However, the Barbie maker's adjusted gross margin fell 260 basis points to 48.6%, weighed down by tariffs, higher costs and a stronger dollar.
Mattel's advertising and promotion expenses rose 11% in the three months ended June 30 as the company ramped up spending to attract customers struggling with higher cost of living.
The company posted an adjusted profit of 1 cent per share, missing expectations of 4 cents, according to data compiled by LSEG.
Net sales of $1.12 billion in the second quarter beat analysts' estimates of $1.10 billion.
The toymaker maintained its expectations for annual adjusted profit of between $1.27 and $1.39 per share and net sales growth of 3% to 6%.
The company said it did not include benefits from any potential U.S. import tariff refunds in its forecast.
Last month, rival Hasbro raised its annual revenue and profit forecasts on resilient demand for its digital gaming business and continued strength in "Magic: The Gathering".
(Reporting by Koyena Das in Bengaluru; Editing by Sriraj Kalluvila and Diti Pujara)
