Mattel Inc. on Monday said third-quarter earnings slid 5 percent on a 13 percent drop in Barbie sales, and it said retailers are hesitant to take on much stock going into the crucial holiday season.
The No. 1 toy maker, whose brands also include Hokey Pokey Elmo, Matchbox and American Girl dolls, said net income fell to $255.9 million from $270 million a year earlier.
Earnings per share were unchanged at 61 cents. Analysts, on average, had been expecting it to earn 60 cents per share, according to Reuters Estimates.
Mattel's sales fell 2 percent to $1.67 billon, which included a 2 percentage point benefit from changes in exchange rates.
Worldwide sales of Barbie products fell 13 percent while sales in the preschool unit Fisher-Price rose 7 percent. American Girl branded product sales were up 9 percent due mainly to the new American Girl Place shop that opened in New York City in November last year.
Mattel's Chief Executive Robert Eckert said the underlying performance of the company's business remained "quite challenging."
"As consumers respond to economic uncertainty, many retailers have been reluctant to take inventory risk for the holiday season," Eckert said in a statement.
Toy makers and retailers depend on the winter holiday season running from Thanksgiving to Christmas for most of their profits. Roughly 50 percent of toy sales are rung up in the fourth quarter alone, according to the NPD Group, a New York-based market information company.
Year to date, shares of Mattel have fallen 7 percent, underperforming the S&P 500, but outperforming its chief rival No. 2 toy maker Hasbro Inc, whose shares slipped nearly 13 percent this year.
