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Mattel cuts FY26 sales, profit outlook on slowing toy demand

By Reuters News


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

Metric

Beat/Miss

Actual

Consensus Estimate

Q3 Sales

Miss

$1.81 bln

$1.84 bln (11 Analysts)

Q3 Net Income

$354 mln

Q3 Adjusted Gross Margin

55.00%


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


Reuters Recommended Reads

  • Nov 3 - China's Yum China Q3 revenue rises on store expansion

  • Nov 4 - Reynolds Consumer Q3 revenue rises 1%, slightly beating estimates

  • Nov 5 - US tariffs squeeze Canadian cabinet makers facing doubling of Trump duty


For questions concerning the data in this report, contact Estimates.Support@lseg.com. For any other questions or feedback, contact reuters.support@thomsonreuters.com.


(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.)

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