Mattel cuts FY26 sales, profit outlook on slowing toy demand

Overview

• U.S. toy maker's Q3 net sales rose 4% but missed analyst expectations

• Adjusted gross margin improved, mainly due to $88 mln in tariff refunds

• Company repurchased $308 mln in shares during first nine months of 2026

Outlook

• Mattel now expects 2026 net sales growth of 1% to 4% in constant currency

• Company sees 2026 adjusted EPS between $1.05 and $1.20

• Mattel expects adjusted gross margin of about 48% for 2026

Result Drivers

• TARIFF REFUNDS - Co said Q3 gross margin improvement was mainly due to $88 mln in tariff refunds received

• HOT WHEELS GROWTH - Hot Wheels gross billings rose 7% as reported, driving vehicle category gains

• GAMES AND ACTION FIGURES - Growth in Games (including Mattel163) and Action Figures contributed to higher gross billings in the category

Company press release:

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 10 "strong buy" or "buy", 4 "hold" and 2 "sell" or "strong sell"

• The average consensus recommendation for the toys & children's products peer group is "buy"

• Wall Street's median 12-month price target for Mattel Inc is $18.50, about 18.8% above its November 4 closing price of $15.57

• The stock recently traded at 10 times the next 12-month earnings vs. a P/E of 10 three months ago

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(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)