October 25, 2018 / 8:10 PM / 10 months ago

CORRECTED-Mattel misses sales estimates as China, Europe demand dips

(Corrects to “profit” from “loss” in final paragraph)

Oct 25 (Reuters) - U.S. toy-maker Mattel missed Wall Street estimates for third-quarter sales on Thursday as its international business was hit by lower demand in China and Europe.

Mattel said lower sales of Fisher-Price and Thomas & Friends products resulted in an 18 percent decline in international sales during the three months ended Sept. 30.

Mattel mis-forecast demand in China relative to supply and is taking action to better manage inventories at retailers, Chief Executive Officer Ynon Kreiz said in an interview.

Mattel and other toy manufacturers have also been rattled in recent years by a consumer shift toward thousands of small toy sellers online as well as kids increasingly preferring toys based on Hollywood movie franchises and YouTube shows.

Mattel’s larger rival, Hasbro Inc, earlier this week blamed those changing consumer tastes in part for its own decline in international revenue.

El Segundo, California-based Mattel’s North American gross sales rose 5.6 percent, marking the first increase in at least six quarters and allaying some concerns about the effects of the retailer Toys ‘R’ Us’ bankruptcy last year.

Four analysts on average had expected a near 13 percent drop in North American sales, according to Refinitiv data.

The rise contrasts with results from Hasbro, which said the liquidation of Toys ‘R’ Us was still having a lingering impact on its U.S. and Canadian businesses.

Mattel on Thursday also said it would consider strategic alternatives for its manufacturing facilities.

Its overall third-quarter net sales fell 8 percent to $1.44 billion, below the $1.49 billion expected by analysts on average.

Mattel reported a net income of $6.3 million, compared with a loss of $603.3 million a year earlier, when the company had higher tax expenses.

Excluding one-time items, Mattel recorded a profit of 18 cents per share. (Reporting by Uday Sampath in Bengaluru Editing by Sai Sachin Ravikumar)

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