Mattel cuts 2026 profit forecast, Q3 profit tops estimates

Mattel (MAT) reported third-quarter 2026 adjusted earnings of $1.30 per share, topping the 95 cents consensus, while net sales of $1.81 billion missed the $1.85 billion consensus.

Shares were little changed at 9:46 a.m. ET, from a $14.97 close.

Mattel also lowered its full-year adjusted operating income forecast to $500 million to $570 million.

Here's how the company did:

• Net sales: $1.81 billion vs. $1.74 billion a year earlier, $1.85 billion expected
• Adjusted EPS: $1.30 per share vs. 91 cents a year earlier, 95 cents expected
• Reported EPS: $1.23 per share vs. 88 cents a year earlier
• Adjusted gross margin: 55.0% vs. 50.2%
• Adjusted operating income: $502 million vs. $395 million a year earlier
• Net income: $354 million vs. $278 million a year earlier

Net sales rose 4% as reported and 3% in constant currency. North America rose 4%, and International rose 5%.

Gross margin rose to 54.8% from 50.0%, mainly because of $88 million of tariff refunds. Inflation and higher royalties more than offset other benefits, including the contribution of Mattel163, cost savings and favorable foreign exchange.

Net income fell in each of the three quarters before this one, from $278.4 million in the third quarter of 2025 to a loss of $18.2 million in the second quarter of 2026.

2026 guidance

Mattel now expects net sales growth of 1% to 4% in constant currency, from the +3% to 6% it forecast on Aug. 4. It expects adjusted gross margin of roughly 48%, from about 50%.

Adjusted operating income is now expected at $500 million to $570 million, from $580 million to $630 million. Adjusted EPS is forecast at $1.05 to $1.20, from $1.27 to $1.39.

The adjusted tax rate is expected to be roughly 23%, from about 24%, and foreign exchange is expected to add roughly 1% to full-year net sales.

Cash and buybacks

Cash used for operating activities was $114 million over the first nine months, against $203 million a year earlier.

Mattel repurchased $308 million of shares in the first nine months, compared with $412 million a year earlier. Roughly $1.2 billion remains under its $1.5 billion authorization.

Mattel also recorded a $147.9 million gain on its previously held 50% equity interest in Mattel163, which it excludes from adjusted results.

Executive change

Steve Totzke, previously President and Chief Commercial Officer, was named President and Chief Operating Officer, effective Nov. 11. He will report to Lynch.

Roberto Stanichi, President, Chief Marketing and Brand Officer, will step down effective Nov. 10 to pursue another opportunity.