NEW YORK – Toy maker Mattel Inc. (MAT) reported "disappointing" quarterly results on Monday, hit by a sharp drop in Barbie sales, while rival Hasbro Inc. (HAS) posted higher net income but also fell short of Wall Street's earnings per share estimates.
The companies' results showed the strain toy makers continue to face from intense pricing competition and rising energy costs, which are squeezing both profit margins and consumers' wallets.
Mattel, the top U.S. toy maker, reported third-quarter earnings of $225.3 million, or 55 cents per share, down from $255.8 million, or 61 cents per share, a year earlier.
Wall Street analysts on average had expected 61 cents per share, according to Reuters Estimates.
Mattel, which last week announced a consolidation of its Mattel and Fisher-Price (search) units, is trying to stem a decline in sales of Barbie (search) as girls are being lured to competing Bratz dolls (search), made by MGA Entertainment Co.
The slide continued in the third quarter, as Mattel said worldwide gross sales for the Barbie brand dropped 18 percent.
"Third-quarter results are disappointing as sales increases in much of our portfolio were offset by declines in the Barbie brand," Chief Executive Robert Eckert said in a statement. "Overall, we continue to experience the effect of a difficult retail environment as well as cost increases."
Mattel's quarterly revenue was flat at $1.67 billion. Analysts were expecting $1.72 billion.
Meanwhile, Hasbro posted higher quarterly profit, helped by strength in its Star Wars toys.
Hasbro, also known for its Furby toys and classic board games like Candy Land, reported third-quarter earnings of $92.1 million, or 47 cents per share, up from $88.7 million, or 43 cents per share, a year earlier.
Wall Street, on average, was expecting earnings of 51 cents per share, according to Reuters Estimates.
"Our performance year-to-date ... reinforces the confidence we have in our ability to achieve our full-year financial goals," said Alfred Verrecchia, president and chief executive, in a statement.
But he said it remains to be seen what impact the higher cost of gasoline and expected increases in home heating costs will have on consumer spending during the holiday season.
Hasbro said quarterly revenue rose to $988.1 million from $947.3 million. Analysts, on average, were expecting revenue of $997.1 million.
Revenue in its U.S. Toys segment, which includes its Star Wars (search) and Furby toys, was $393.1 million, up from $369.7 million a year ago. Its games segment revenues were $252.9 million, up from $236.5 million a year ago.
Shares of Mattel have declined roughly 18 percent this year, while rival Hasbro is down 3 percent and the Dow Jones U.S. Toy Index (search) has fallen 9 percent.
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