Canada’s toy market is expanding, although the growth is concentrated in particular categories. Games, building sets, action figures and vehicles are drawing increased spending, while dolls continue to face a more difficult environment.
Mattel’s latest quarterly results place the company near the centre of those shifts. Hot Wheels continues to gain momentum, Mattel is building a larger presence in construction toys, UNO is expanding across physical and digital play, and entertainment properties are driving demand for action figures. Barbie, meanwhile, is preparing for a wider content, product and merchandising reset.
Tracked Canadian toy sales reached approximately $2.68 billion in 2025, up 14 per cent from the previous year, according to Circana data published by the Canadian Toy Association. Games and puzzles increased 56 per cent, building sets rose 25 per cent, action figures grew 13 per cent and vehicles advanced seven per cent. Doll sales declined one per cent.
Mattel reported a 10 per cent year-over-year increase in second-quarter net sales, or nine per cent in constant currency, supported by double-digit growth in North America. The company said consumer demand remained positive into the third quarter and reiterated its full-year guidance. Mattel did not disclose separate Canadian financial results.
The results provide a useful indication of how one of the world’s largest toy companies is responding to changing consumer demand, including the growing importance of collectors, licensed entertainment, digital engagement and products that reach across multiple price points.
Hot Wheels Continues to Build Momentum
Hot Wheels provides Mattel’s strongest connection to the Canadian market.
The Hot Wheels Singles 1:64 Assortment was Canada’s top-selling toy product of 2025, according to Circana. It also led the country’s vehicles category, while the same assortment ranked as the top-selling toy globally.
Mattel said Hot Wheels grew 12 per cent during the second quarter, supported by continued demand from children and adult collectors. The company described Hot Wheels as its largest brand since 2024 and said the business is approaching $2 billion globally.
The brand now reaches consumers across a wide range of products and price levels. Entry-level die-cast vehicles encourage frequent purchases, while premium models, larger playsets and licensed collaborations provide higher-value options. Collector-focused releases also allow Hot Wheels to reach adults who may engage with the brand through automotive culture, nostalgia and product display.
Mattel sees further room to extend Hot Wheels through building sets, consumer products, experiences, digital gaming and content. Executives said the brand has developed into a broader car-culture and lifestyle property, giving the company additional ways to engage shoppers beyond the traditional vehicle aisle.
For Canadian retailers, that breadth creates opportunities to merchandise Hot Wheels across impulse products, children’s toys, premium collectibles and larger construction sets. It also supports repeat purchases, since collectors and younger consumers often return for new models, licences and limited releases.
Building Sets Create Another Avenue for Growth
Mattel is expanding its relationship with Hot Wheels through Mattel Brick Shop, a building-set line introduced in 2025.
The strategy gives the company entry into one of Canada’s strongest toy categories. Canadian building-set sales rose 25 per cent in 2025 to approximately $516 million, making the category considerably larger than vehicles, dolls or action figures.
Mattel described building sets as one of the toy industry’s fastest-growing areas and said the initial Hot Wheels Brick Shop products had performed well. The company plans to expand the assortment through 2027.
Brick Shop products are reported outside the Hot Wheels brand results, giving Mattel another source of revenue around a property that already holds a leading position in Canada.
The line also allows the company to use its relationships with automakers and its reputation for vehicle authenticity in a new product category. A shopper who knows Hot Wheels through inexpensive die-cast cars can now encounter the brand through detailed construction sets positioned at higher price points.
Mattel is entering a category with deeply established competitors, and the company has not disclosed Canadian Brick Shop sales. Even so, the size and recent growth of Canada’s building-set market point to a meaningful opportunity.
Barbie Prepares a Retail and Content Reset
Barbie presents a different challenge for Mattel. The brand declined during the second quarter, partly due to lower streaming-content revenue and softer product performance. Mattel expects Barbie’s trends to improve during the second half of 2026 and has maintained its expectation that the brand will return to growth in 2027.
The planned recovery includes a substantial increase in digital content, the rerelease of several classic animated titles, a new Barbie in the Nutcracker special and a redesigned Barbie Dreamhouse.
Mattel is also introducing updated packaging intended to make the assortment easier to navigate in stores. The company plans to support the Dreamhouse through a wider campaign called Barbie Is Moving, which will include brand partnerships, consumer products and retail executions.
The Canadian market illustrates both Barbie’s continued strength and the pressure facing the wider category. Canadian doll sales declined in 2025, following larger decreases during the previous two years. The Barbie Dreamhouse still ranked as Canada’s top-selling doll product, according to Circana.
That gives Mattel a recognized flagship product around which to organize its next campaign. The new Dreamhouse, revised packaging and increased content may help retailers create a clearer presentation around the brand during the holiday season.
Mattel also plans to increase Barbie’s appeal among adult consumers through fashion, detailed accessories, partnerships and collector collections. Executives pointed to the success of Hot Wheels, UNO and Monster High among adult fans as a model that could be applied more extensively to Barbie.
UNO Expands Across Physical and Digital Play
Games and puzzles delivered the largest increase among the major Canadian toy categories in 2025, rising 56 per cent to approximately $464 million.
Mattel’s games business grew during the second quarter, led by UNO and the contribution of Mattel163, the mobile-game developer that Mattel fully acquired earlier this year. The acquisition contributed nearly $49 million in quarterly revenue and approximately $14 million in adjusted operating income.
Mattel is preparing the global commercial launch of UNO Wild, a self-published mobile game currently in soft launch. The company said the title had met its production milestones and is expected to launch more broadly in early 2027.
UNO demonstrates how Mattel is extending familiar physical products into digital experiences. The traditional card game remains widely distributed, while mobile gaming gives the company another way to engage consumers and build direct relationships around the brand.
Entertainment and Collectibles Drive Demand
Action figures were another area of strength, supported by Toy Story 5, Masters of the Universe, WWE and early shipments tied to Mattel’s DC partnership.
Canadian action-figure sales rose 13 per cent in 2025. Mattel said it became the leading U.S. action-figure manufacturer during June, according to Circana, although the company did not provide a comparable Canadian ranking.
The Masters of the Universe film had a weaker theatrical performance than initially hoped, but Mattel said the franchise’s gross billings had more than tripled year to date. Management attributed the increase to the wider attention generated by the film, its streaming release and the surrounding product assortment.
The results reflect the increasing influence of entertainment calendars on toy merchandising. Film releases, streaming programs, gaming franchises and nostalgic properties can support coordinated product launches across action figures, apparel, collectibles and other licensed merchandise.
Adult consumers are also becoming more important to the industry. Collector products can command higher prices and bring toy merchandise into specialty stores, hobby retailers, bookstores, gaming shops and other channels serving pop-culture audiences.
Little People Stands Out Within Fisher-Price
Mattel’s infant, toddler and preschool business declined during the quarter, largely due to weakness at Fisher-Price. Little People was a notable exception.
The brand generated strong double-digit point-of-sale growth, supported by partnerships involving Nintendo, Toy Story, Disney Princess, Frozen and Mickey Mouse, along with its core product range. Mattel believes Little People can become a more meaningful growth driver.
Its familiar design and cross-generational appeal give Mattel another platform for connecting preschool products with major entertainment properties. The company is also preparing another relaunch of Thomas & Friends, supported by new animated content and die-cast products.
Holiday Merchandising Comes Into Focus
Mattel enters the second half of the year with lower retailer inventories and a more stable ordering environment in the United States. The company said fall retail resets were returning to a more traditional August schedule after delays in 2025. Those comments were specific to the U.S. market and should not be interpreted as confirmation of Canadian ordering activity.
The broader brand strategy still provides clues about what Canadian shoppers are likely to encounter as the holiday season approaches: deeper Hot Wheels assortments, a larger building-set presence, more collector-focused products, entertainment-linked displays and a refreshed Barbie presentation.
Mattel’s strongest brands are positioned in several categories already capturing increased Canadian spending. Hot Wheels provides the clearest foundation, supported by vehicles, adult collectors and the expansion into building sets. UNO connects the company to rapid growth in games, while action figures benefit from a busy entertainment and licensing pipeline.
Barbie’s reset will be an important test. Its continued leadership within the Canadian doll category gives Mattel a solid starting point, but reversing broader softness will require products and merchandising that connect with children, parents and adult fans.
The 2026 holiday season should offer an early indication of how effectively Mattel can translate its portfolio strategy into stronger shelf presence and consumer demand across Canada.
