Mattel Earnings Miss Sends Stock Tumbling
Mattel earnings miss after weaker Q4 and below-consensus FY2026 guidance at $1.24 prompted a steep share repricing and near-term earnings pressure.
KEY TAKEAWAYS
- Company set FY2026 adjusted EPS midpoint at $1.24 tied to a year of strategic investments.
- Q4 net sales were $1.77B and adjusted EPS was $0.39, missing Street forecasts.
- Shares had fallen about 25.6% following the release, signaling steep near-term repricing risk.
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Mattel’s earnings miss on February 10, 2026, pushed shares sharply lower after the company reported weaker-than-expected fourth-quarter sales and adjusted earnings. It also cut its full-year 2026 guidance, citing softer December U.S. billings and a year of strategic investments that will pressure near-term results.
Fourth-Quarter Results and Segment Performance
Mattel reported fourth-quarter 2025 net sales of $1.77 billion, a 7.3% increase year over year but about 3.7% to 3.9% below analyst estimates. Adjusted earnings per share rose 11% to $0.39 but missed forecasts by roughly 26% to 29%. Net income declined 24.6% to $106.2 million, reflecting margin compression.
Gross profit fell 3.0% to $810.4 million, and operating income dropped 10.8% to $141.1 million. Adjusted EBITDA was $234.2 million, about 26% below estimates near $316.7 million. The operating margin narrowed by 150 basis points to approximately 8.0%.
By region, North America generated $1.02 billion in revenue, up 5% year over year, while international sales rose 11% to $745.7 million. For the full year 2025, Mattel reported net sales of $4.41 billion, a 3.0% increase from 2024.
Guidance and Market Reaction
Mattel set full-year 2026 adjusted EPS guidance with a midpoint of $1.24, about 29.6% below prior consensus of $1.75. The company attributed the outlook to weaker December U.S. gross billings and a cautious consumer-spending environment. Management said it expects a year of strategic investments that will likely pressure near-term earnings.
CEO Ynon Kreiz said, "Consumer demand was positive in every region for both the quarter and full year." He also noted the international business finished the year with market-share gains in key categories.
Shares fell 25.59% in the 24 hours after the release, marking Mattel’s worst intraday performance in more than four decades. The combination of below-consensus guidance and the planned investment program signals near-term earnings pressure and shifts focus toward longer-term growth initiatives.
The company did not disclose any material regulatory actions or merger-and-acquisition activity related to the announcement. A standard SEC Form 8-K is expected within four business days of the release.
