Second Quarter Highlights

- Worldwide net sales up 7 percent;
- Domestic gross sales down 3 percent and international gross sales up 18 percent;
- Worldwide gross sales for core brands: Barbie® up 6 percent; Hot Wheels® up 20 percent; Core Fisher-Price® up 22 percent and American Girl® brands down 10 percent;
- Gross margin increased 260 basis points of net sales; SG&A increased by 170 basis points of net sales;
- Operating income was $63.5 million compared to operating income of $49.9 million in the second quarter of 2006; and
- Earnings per share of $0.11 vs. prior year of $0.10, which included a tax benefit of $0.02.

EL SEGUNDO, Calif., July 16, 2007 -- Mattel, Inc. today reported 2007 second quarter financial results. For the quarter, the company reported net income of $43.1 million, or $0.11 per share, compared to last year's second quarter net income of $37.4 million, or $0.10 per share. Last year's quarterly net income was positively impacted by tax benefits of approximately $6.2 million, or $0.02 per share, primarily relating to an audit settlement with a state tax authority.

"Overall we had a good quarter, especially given the comparisons with strong sales from movie-related toys in last year's second quarter," said Robert A. Eckert, chairman and chief executive officer of Mattel. "While the first half is not particularly significant to the highly seasonal toy industry, our positive results continue to reflect the benefits of our diversified portfolio of global brands."

Financial Overview

For the quarter, net sales were $1.02 billion, up 7 percent compared to $957.7 million last year, including favorable changes in currency exchange rates of 3 percentage points. On a regional basis, second quarter gross sales decreased 3 percent in the U.S. and increased 18 percent in international markets, including favorable changes in currency exchange rates of 7 percentage points. Operating income for the quarter was $63.5 million, compared to prior year's operating income for the quarter of $49.9 million.

The company's debt-to-total-capital ratio of 18.8 percent is in line with the company's capital and investment framework. Consistent with the seasonality of the business, during the first half the company's cash and equivalents declined by approximately $463 million, compared with a decline of approximately $373 million in the first half of 2006.

Sales by Business Unit

Mattel Girls and Boys Brands

For the quarter, worldwide gross sales for the Mattel Girls & Boys Brands business unit were $638.4 million, up 5 percent versus a year ago. Worldwide gross sales for the Barbie® brand were up 6 percent, with increases in international markets more than offsetting declines in the U.S. Worldwide gross sales for Other Girls Brands were down 1 percent. Worldwide gross sales for Wheels, which includes the Hot Wheels®, Matchbox® and Tyco® R/C brands, were up 20 percent, led by double-digit growth in the Hot Wheels® and Matchbox® lines. Worldwide gross sales for the Entertainment business, which includes Radica® and Games and Puzzles, declined 2 percent.

Fisher-Price Brands

Second quarter worldwide gross sales for the Fisher-Price Brands business unit, which includes the Fisher-Price® Core, Fisher-Price® Friends and the Power Wheels® brand, were $410.4 million, up 12 percent versus the prior year. This reflects continued strong growth in Core Fisher-Price® worldwide.

American Girl Brands

Second quarter gross sales for the American Girl Brands business unit, which offers American Girl® branded products directly to consumers, were $55.8 million, down 10 percent versus last year.

About Mattel

Mattel, Inc., (NYSE: MAT, http://www.mattel.com) is the worldwide leader in the design, manufacture and marketing of toys and family products. The Mattel family is comprised of such best-selling brands as Barbie®, the most popular fashion doll ever introduced, Hot Wheels®, Matchbox®, American Girl®, Radica® and Tyco® R/C, as well as Fisher-Price® brands, including Little People®, Power Wheels® and a wide array of entertainment-inspired toy lines. Mattel is recognized as one of the 100 Most Trustworthy U.S. Companies by Forbes Magazine and is ranked among the 100 Best Corporate Citizens by CRO Magazine. Committed to ethical manufacturing sustainable business practices, Mattel marks a 10-year milestone in 2007 for its Global Manufacturing Principles. With global headquarters in El Segundo, Calif., Mattel employs more than 30,000 people in 43 countries and territories and sells products in more than 150 nations. Mattel's vision is to be the world's premier toy brands -- today and tomorrow.