Mattel cuts annual outlook as CEO transition deepens turnaround pressure

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Mattel cuts outlook, CEO transition

Highlights

Mattel lowers its fiscal 2026 sales growth forecast to 1%-4% and cuts annual adjusted EPS guidance to $1.05–$1.20, down from $1.27–$1.39.
Mattel appoints new CEO Lynch, CFO Peter Griffith, and COO Steve Totzke as it accelerates its IP-forward strategy amid weak U.S. toy demand.
Q3 net sales rise 4% to $1.81 billion—below LSEG estimates—while adjusted gross margin improves to 55.0% on $88 million tariff refunds and adjusted EPS hits $1.30.

Forecast cut and management reshuffle

As reported by Reuters, Mattel says it now expects fiscal 2026 sales growth of 1% to 4%, down from its earlier forecast for a 3% to 6% increase. The company also cuts its annual adjusted earnings outlook to $1.05 to $1.20 per share, versus its previous range of $1.27 to $1.39.

Toymakers are contending with weak demand as U.S. consumers, pressured by higher energy costs, pull back on discretionary purchases. Mattel is pursuing an IP-forward strategy to expand brands including Barbie, Hot Wheels and UNO across entertainment, licensing and consumer products in an effort to build growth beyond traditional toy sales.

Lynch, who takes over earlier this week after longtime CEO Ynon Kreiz left in October, says in a statement that the company will focus its resources on its biggest opportunities. Mattel also names Peter Griffith as finance chief to succeed Paul Ruh, and appoints insider Steve Totzke as chief operating officer effective November 11.

Holiday season stakes and investor pressure

Mattel enters the key holiday selling period under mounting pressure from shareholders including Ariel Investments and Southeastern Asset Management, which have urged the company to explore strategic alternatives, including a potential sale.

In the third quarter ended September 30, adjusted gross margin expands to 55.0% from 50.2% a year earlier, helped by $88 million in tariff refunds. Net sales rise 4% to $1.81 billion but miss analysts' expectations of $1.84 billion, according to LSEG data, while adjusted earnings of $1.30 per share top estimates of 94 cents.

Rising U.S. toy prices ahead of the holiday shopping season were the focus of our earlier coverage, as tariffs on Chinese imports and higher energy- and shipping-linked costs pushed the category up faster than many others. The piece noted that even after tariff rates eased, shelf prices remained elevated because many items were priced under the earlier, higher-tariff regime, while manufacturers such as Mattel and Hasbro were still feeling margin pressure from lingering tariff effects and broader inflationary inputs.

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