Mattel Inc. reported fourth‑quarter 2025 results on February 10, 2026, with revenue of $1.77 billion, a 3.7% decline from the $1.83 billion reported a year earlier. Adjusted earnings per share were $0.39, falling 26–28% below the consensus estimate of $0.53–$0.54. The miss was driven by weaker U.S. holiday demand and a sharp increase in discounting, which compressed the adjusted gross margin to 46.0% from 50.7% in the prior year.
Segment analysis shows that Vehicles—led by Hot Wheels—along with Action Figures, Building Sets, and Games grew, offsetting a decline in the Infant, Toddler, and Preschool category. International sales performed as expected, helping to cushion the overall revenue shortfall. The mix shift toward higher‑margin core brands contributed to the revenue decline but also highlighted the company’s focus on its strongest product lines.
Management lowered its 2026 adjusted EPS guidance to $1.18–$1.30, a reduction from the $1.41 reported for the full year 2025. The consensus estimate for 2026 EPS was $1.75, so the cut signals a cautious outlook. Revenue guidance for the full year was kept at $5.51–$5.67 billion, below the $5.62 billion consensus, reflecting concerns about near‑term demand and the impact of strategic investments in digital gaming and entertainment.
CEO Ynon Kreiz noted that December order growth was slower than expected because retailers were holding back orders amid tariff uncertainty. CFO Paul Ruh highlighted that increased promotions to support sales had a larger‑than‑anticipated effect on margins. Both executives emphasized a brand‑centric strategy and significant investment in digital and entertainment initiatives, which they expect to pay off from 2027 onward but that will weigh on short‑term profitability.
Investors reacted negatively to the earnings miss and guidance cut. Analysts cited the significant EPS shortfall and the lower 2026 guidance as the primary drivers of the market’s response, underscoring concerns about near‑term earnings while acknowledging the company’s long‑term growth strategy.
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