The toy and family entertainment company saw a 16% year-over-year drop in sales in North America, partially offset by a 7% increase in its international business, according to a Wednesday earnings release.

Overall, the company’s net sales declined 6% year over year in the second quarter, per the release.

“We continued to execute our strategy and demonstrate operational excellence, achieving strong international growth and expanding adjusted growth margin, while our U.S. business was impacted by global trade dynamics and timing shifts in retailer ordering patterns,” Mattel Chairman and CEO Ynon Kreiz said Wednesday during the company’s quarterly earnings call.

Mattel Chief Financial Officer Paul Ruh said during the call that net sales in the U.S. were impacted by “retailers adjusting order patterns in light of uncertainty around tariffs.”

Rival toy company Hasbro, which also reported its quarterly earnings Wednesday, said its overall revenues were down 1%, in part due to headwinds caused by tariffs and some “downstream impacts” from trade uncertainty in the retail landscape.

Mattel, which is the home of brands like Barbie, Hot Wheels, Fisher-Price and American Girl, has been dealing with these challenges by optimizing for profitable growth, seeking supply chain efficiencies and marking some pricing adjustments, especially in the U.S., Ruh said during the call.

Kreiz said that the company already implemented necessary pricing actions in the U.S., and, “based on what we know today,” does not expect to make any more increases this year.

The company is also working on new ways to “capture the full value” of its intellectual property, Kreiz said. It launched its first UNO Social Club, a live experience based on its card game UNO, in Las Vegas in May; is scaling its Mattel Studios pipeline toward its goal of releasing one or two films per year, starting in 2026; and is on track to release its first self-published digital game in 2026, Kreiz said during the call.

Mattel announced in June that it partnered with OpenAI to add artificial intelligence to its most iconic toys, including Barbie and Hot Wheels.

“AI has the power to expand on our mission and broaden the reach of our brands in new and exciting ways,” Kreiz said during the earnings call. “Mattel’s work with OpenAI will enable us to leverage new technologies to solidify our leadership in innovation and reimagine new forms of play.”

Looking ahead, Mattel expects its net sales to return to growth, though it lowered its guidance for net sales in fiscal year 2025. The company now expects net sales to rise 1% to 3%, while its previous guidance called for 2% to 3%, according to the earnings release.

“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,” Kreiz said during the call.