Barbie maker Mattel forecasts annual profit below estimates on cautious consumer spending

By Neil J Kanatt

Feb 10 (Reuters) - Mattel MAT.O on Tuesday forecast full-year profit below Wall Street expectations after missing fourth-quarter estimates, as weak discretionary spending weighed on toy demand.

U.S. shoppers remained cautious through the key holiday season, traditionally a sales driver for toymakers, with inflation and economic uncertainty curbing purchases.

Heavy promotional activity in December pressured margins, CEO Ynon Kreiz told Reuters, adding U.S. segment sales during the month grew "less than expected."

The company, which unveiled a $1.5 billion share buyback plan to be completed by 2028, said it had fully offset the U.S. tariff cost impact through measures including supply‑chain diversification and product optimization.

Mattel expects 2026 adjusted earnings per share of $1.18 to $1.30, below analysts' average estimate of $1.75, according to data compiled by LSEG.

Fourth-quarter net sales rose 7% to $1.77 billion, missing expectations of $1.84 billion. Adjusted earnings of 39 cents per share fell short of the 54 cents estimate.

ENTERTAINMENT PUSH

Mattel continues to expand beyond toys, aiming to build an entertainment portfolio around its brands. It hopes to repeat the success of the 2023 blockbuster "Barbie" with a live‑action "Masters of the Universe" film in June and the Matchbox movie on Apple TV in October.

The company said it would acquire the remaining 50% of Mattel163, a joint venture media games developer created with China's NetEase for $159 million, as it targets growth in self‑published digital gaming.

Supported by about $150 million in revenue from the acquisition, Mattel forecast that sales this year would rise 3% to 6%.

The company announced a multi‑year licensing deal with Paramount Skydance PSKY.O to develop and market Teenage Mutant Ninja Turtles products starting in 2027.