MATTEL, THE world’s largest toymaker, declined the most in more than three years after North American retailers kept inventories of toys and dolls tight, causing first-quarter sales to trail analysts’ estimates.

Sales in the three months to March 31st dropped 2.5 per cent to $928.4 million, the company said yesterday in a statement, below analysts’ estimates.

Shares in the company dipped 9 per cent by lunchtime yesterday in New York. Mattel had gained 23 per cent this year before yesterday. Mattel’s largest retail partners were cautious on orders and reduced inventories at mid- to high-single-digit percentage rates, chief executive Bryan Stockton said. Gross sales of Barbie products, which fell 6 per cent globally in the quarter, were particularly affected by the retailers’ inventory restrictions, Mr Stockton said.

“Retailer inventory reductions were more drastic than we thought,” he said on a conference call with analysts, adding that he expected retailers to remain cautious. The sales decline for Barbie was the first in 10 quarters, Stifel Nicolaus analyst Drew Crum wrote in a note to clients. – (Bloomberg)