Mattel's stock experienced a significant after-hours plunge of 15.86% following the release of its fourth-quarter financial results and outlook for the current year.

The sharp decline was driven by the company reporting sales and profit that fell short of Wall Street expectations for the critical holiday quarter. Mattel's anticipated sales surge in the weeks leading up to Christmas did not materialize, prompting the toy maker to increase discounts which significantly pressured margins.

Furthermore, the company 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 and inflation, particularly in the U.S. market during the key holiday season.