New York, Feb 11, 2026, 17:47 EST — After-hours trading
- After Wednesday’s close, Mattel shares dropped roughly 25%, settling at $15.80.
- After missing Q4 targets and warning of increased spending, the Barbie maker projected 2026 profits below expectations.
- Investors are debating a $1.5 billion buyback plan amid shifting retailer orders, inventory fluctuations, and discounting pressures.
Mattel (MAT.O) shares tumbled roughly 25% to $15.80 in after-hours trading Wednesday, following disappointing holiday-quarter results and a grim outlook that threw investors off balance and sparked a flurry of analyst revisions.
This move is significant because it sits at the crossroads of two challenges: retailers are placing orders later, shifting inventory risks onto suppliers, while Mattel is investing in digital games and entertainment—an effort that could pressure margins in the short term. 1
It also prepares a new tape for the next session. Drops this steep usually attract quick money, push option premiums wider, and force index and quant funds to adjust their positions — while longer-only investors hold back, waiting to judge if the guidance is cautious or signals a true downturn.
Late Tuesday, Mattel projected adjusted earnings per share for 2026 between $1.18 and $1.30, falling short of Wall Street forecasts. The company reported fourth-quarter adjusted earnings of $0.39 per share on $1.77 billion in sales, both figures missing estimates. 2
Chief Executive Ynon Kreiz highlighted increased promotions in December alongside weaker U.S. sales. “December gross billings in the U.S. ended up growing less than expected,” the company said, referencing a key sales figure it monitors closely during the holiday season. 1
Mattel announced plans to pour roughly $110 million into digital games in 2026, alongside about $40 million earmarked for performance marketing—spending linked directly to measurable outcomes like clicks or sales. This “investment year” approach has raised concerns among some analysts, who believe it could push back a rebound in earnings. 1
D.A. Davidson analyst Keegan Cox described it as a catch-up move. “Mattel is just beginning an investment similar to the one Hasbro made in gaming more than seven years ago,” he said. 1
Mattel has agreed to purchase NetEase’s 50% stake in Mattel163 for $159 million, valuing the mobile games studio at $318 million. This move supports Mattel’s push to expand its brands in app-based gaming. The deal is set to close by the end of Q1. 3
The company announced a multi-year licensing deal with Paramount for Teenage Mutant Ninja Turtles products set to launch in 2027. This adds a new franchise to their pipeline but won’t provide a quick boost to 2026 margins. 4
Mattel announced a $1.5 billion share buyback program, a move aimed at boosting earnings per share—provided cash flow remains steady while discounting clears out inventory. 2
The risks are evident. Should U.S. demand remain tied to promotions, or if retailers continue their “on demand” purchasing—leaving suppliers stuck with excess inventory—Mattel might see more markdowns and volatile quarterly earnings, despite growth abroad. 2
Traders will be keeping an eye Thursday and into next week for any more analyst downgrades or target price cuts. They’ll also watch to see if the stock stabilizes after its recent drop, along with updates on buyback timing and the anticipated Mattel163 closure by the end of Q1. 2
