UPDATE 2-Mattel disappoints in holiday quarter on U.S. weakness

Fri Jan 31, 2014 8:10am EST

(Adds sales by brand, stock drop)

By Dhanya Skariachan

Jan 31 (Reuters) - Mattel Inc reported lower-than-expected quarterly results on Friday due to weak demand in the United States during the all-important holiday selling season, and the No. 1 toy company's shares fell nearly 10 percent.

The latest holiday season turned out to be one of the weakest since 2008, when the U.S. economy was reeling from a recession. Bad weather, limited discretionary dollars for many shoppers and six fewer days between Thanksgiving and Christmas in 2013 hurt U.S. sales for many retailers.

For Mattel, fourth-quarter gross sales fell 10 percent in North America.

"By every account, 2013 was a challenging and transformative year at retail," Chief Executive Officer Bryan Stockton said in a statement.

Shares of Mattel were down 9.7 percent at $38.84 in trading before the market opened.

Net income rose to $369.2 million, or $1.07 a share, from $306.5 million, or 87 cents a share, a year earlier. Analysts on average were expecting a profit of $1.20 a share, according to Thomson Reuters I/B/E/S.

Sales fell 6 percent to $2.11 billion, while analysts had forecast $2.37 billion.

Industrywide, demand was particularly weak for action figures and preschool toys, market research firm NPD Group said earlier this month. Those categories are the largest respectively for Mattel and rival Hasbro Inc, Wells Fargo analyst Tim Conder has said.

Mattel's worldwide gross sales were down 13 percent for its Barbie brand; down 8 percent for Hot Wheels, down 13 percent on Fisher-Price and up 3 percent for American Girl. (Reporting by Dhanya Skariachan; Editing by Lisa Von Ahn)