Mattel's stock sinks as weak earnings reveal a tale of two toymakers

By Claudia Assis

Mattel's stock drops more than 20%, while Hasbro's rises to its highest point in six years

Mattel's dolls were no match for Hasbro's fantasy-realm dominance.

Shares of Mattel sank more than 20% on Wednesday as the toymaker reported a lackluster holiday quarter, which stung all the more because rival Hasbro unveiled much better results and saw its stock rise to its highest point in more than six years.

Both toymakers faced a difficult holiday season that was affected by tariff costs and intense promotions. But only one of them had "Magic: The Gathering."

Mattel (MAT) late Tuesday reported adjusted earnings of 39 cents a share on sales of $1.76 billion, which were up 7% from the fourth quarter of 2024. Analysts polled by FactSet expected adjusted earnings of 54 cents a share on sales of $1.84 billion.

Hasbro (HAS) earlier Tuesday reported adjusted earnings of $1.51 a share on sales of $1.45 billion for the holiday quarter, compared with expectations for 96 cents a share on sales of $1.26 billion, according to FactSet.

Mattel's stock was on track for its lowest close since April 23, when it closed at $15.25. It was also suffering its biggest one-day percentage decline since Oct. 4, 1999, when it fell 30%.

Hasbro's stock rose more than 2% after a rally on Tuesday and was headed for its highest close since Oct. 21, 2019, when it closed at $120.16.

Hasbro highlighted a "standout performance" for revenue related to "Magic: The Gathering" and licensed digital gaming, which has been an engine of growth and a source of expanded reach for the company. The stock has gained more than 76% in the past 12 months, contrasting with a loss of about 27% for Mattel's stock in the same period.

Mattel said on Tuesday it had agreed to buy full ownership of the Mattel163 mobile-games studio, a joint venture with NetEase, for $159 million. Mattel163 develops digital versions of Mattel games such as Uno and Skip Bo.

The deal "was the highlight of the earnings as it showcases a shift in the strategy to better compete on the digital side of the business," analysts at Davidson said in a note Wednesday. But that likely will come at the cost of profits due to needed investments in selling as well as general and administrative expenses in 2026, they said.

The investment in digital games should pay off in the long term, but it adds more questions in the near term, the Davidson analysts said. They expect Mattel in 2026 to be "more focused on growth in toys from normalized order patterns and a strong movie release schedule."

Hasbro remains a top pick among toymakers for analysts at Jefferies. The company is "the most compelling idea in our toy coverage, given the strength and durability" of the "Magic: The Gathering" engine, they said.

"The company enters 2026 with momentum, differentiated [intellectual property], expanding distribution, and strengthened financial flexibility, positioning [Hasbro] to outperform peers and deliver superior multi-year earnings power," they said.

-Claudia Assis

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02-11-26 1118ET