Mattel cut its annual sales and profit forecasts on Thursday, days before the crucial holiday shopping season, sending its shares down about 6 per cent in extended trading and raising the stakes for new chief executive Roger Lynch.

The Barbie maker now expects fiscal 2026 sales growth of 1 to 4 per cent, down from 3 to 6 per cent, and adjusted profit of $1.05 to $1.20 a share, down from $1.27 to $1.39. The company said sales softened towards the end of the third quarter and the weakness had continued into the fourth quarter.

Earnings beat, helped by tariff refunds

Third-quarter adjusted earnings rose to $1.30 a share from 91 cents a year earlier, well above the 94 cents analysts had expected, according to LSEG data. Net sales rose 4 per cent to $1.81 billion but missed expectations of $1.84 billion. Adjusted gross margin expanded to 55.0 per cent from 50.2 per cent, helped by $88 million in tariff refunds.

Lynch, who took over as chief executive in October, said his first weeks had reinforced his belief in the company's potential, and set out priorities of strengthening brands, driving innovation and investing with discipline. The company also named Steve Totzke as president and chief operating officer from 11 November.

Holiday season in focus

The guidance cut excludes the benefit of tariff refunds already recognised this year and any further refunds in the rest of 2026. With demand softening and the holiday season about to begin, investors will be watching whether the toy maker's best-known brands can recover lost ground in the final weeks of the year.