Shares of Mattel (MAT 2.84%) were moving higher today after the toymaker reported better-than-expected results in its first-quarter earnings report.

While Mattel suspended its guidance due to tariffs, the results were still better than expected, and it said the second quarter was off to a strong start.

As of 1:48 p.m. ET, the consumer stock was up 2.7%.

Image source: Getty Images.

Mattel passes the test

Mattel is still struggling, but in a challenging environment, investors seemed satisfied with the results.

Revenue rose 2%, or 4% in constant currency, to $826.6 million, which was well ahead of the analyst consensus at $791.5 million.

Mattel's gross margin also improved in the quarter from 48% to 49.4%, a positive sign, though it continued to lose money. It had an adjusted operating loss of $16 million, which compared to a loss of $23 million in the quarter a year ago. The first quarter is the seasonally weakest period.

On the bottom line, it posted an adjusted loss per share that narrowed from $0.05 to $0.03, which also topped estimates at a loss of $0.10 per share.

CEO Ynon Kreiz said, "This was a strong quarter for Mattel, with positive performance and continued operational excellence." He added, "As we navigate the current period of macroeconomic volatility, we are adapting with speed, agility, and discipline."

What's next for Mattel

On the earnings call, Kreiz said the company planned to raise prices to absorb the impact of tariffs, though the tariffs would not affect the second quarter due to the timing of inventory shipments.

In response to the tariffs, the company is diversifying its supply chain away from China, optimizing product sourcing and mix, and raising prices as necessary.

It also reaffirmed its $600 million share repurchase target for 2025, which would reduce shares outstanding by approximately 11%.

Overall, Mattel's better-than-expected results are encouraging, but this is a company that has struggled to grow on the top and bottom lines for years now, and the uncertainty around tariffs will only make that more difficult.

Investors should temper their expectations until there's more clarity on the macro front.