Mattel's stock plummeted 31.15% in pre-market trading on Wednesday, following the release of its fourth-quarter financial results and outlook for 2026.

The sharp decline was driven by the company reporting both earnings and sales that fell short of Wall Street expectations for the critical holiday quarter. Mattel's adjusted earnings per share of $0.39 missed the consensus estimate of $0.54, while net sales of $1.77 billion came in below the expected $1.84 billion. The company's anticipated sales surge in the weeks leading up to Christmas did not materialize, prompting increased discounts that significantly pressured margins.

Furthermore, Mattel issued guidance for 2026 that was well below analyst estimates, forecasting adjusted earnings per share of $1.18 to $1.30 compared to the consensus expectation of $1.75. The weak outlook reflects ongoing challenges with consumer discretionary spending amid economic uncertainty, particularly in the U.S. market during the key holiday season. The results stood in contrast to rival Hasbro, which reported stronger performance, highlighting Mattel's relative weakness in the competitive toy market.