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Mattel's profit down 53% on drop in sales for Barbie, Hot Wheels

Mattel Inc. said Monday that its first-quarter profit dropped 53 percent, pulled down by costs tied to an acquisition and lower sales for Barbie and Hot Wheels.

Results for the largest U.S. toymaker were below expectations, and its shares fell more than 7 percent in trading. But the disappointing results came during what is typically a slow time for toy sales, so Mattel executives say they remain optimistic.

"We consider the first quarter to be spring training for the toy industry," said CEO Bryan Stockton. "We continue to have momentum in many key areas, and we're focused on improving our performance in a couple of areas like North America and Fisher-Price."

Mattel's toy brands like Barbie, Hot Wheels and American Girl have been perennial best sellers in the toy aisle.

Two of Mattel's most popular brands had declines across the globe. Worldwide gross sales for Barbie slipped 6 percent in the quarter, while sales of other girls' brands rose 22 percent. The Wheels segment -- which includes Hot Wheels and Matchbox -- reported a 6 percent sales decline.

Meanwhile, sales for Fisher-Price, which makes preschool toys such as Power Wheels, were essentially flat at $310.2 million, while sales of American Girl climbed 4 percent on strong sales of the 2012 Girl of the Year, McKenna. International results at Fisher-Price were up 8 percent for the quarter.

During a conference call with analysts, Stockton described Fisher-Price, which is headquartered in East Aurora, as a "work in progress."

Stockton said 2012 would continue to be a transition year for Fisher-Price, noting that Mattel had developed a new ad campaign for it, "The Joy of Learning," that launched in TV ads last fall.

Mattel has carried over that strategy into this year, focusing on retail sales for Fisher-Price. Stockton said Mattel will try to "deepen the relationship we have with new moms" by expanding the campaign digitally with a global Fisher-Price website that will be rolled out in the next few months.

Stockton said Fisher-Price is particularly strong in international markets like Latin America and Asia. "Here in the U.S., frankly, it was a little softer than we would have liked to have seen, but we think of this as a brand that responds differently than a typical kid's brand."

Results were impacted by the $680 million acquisition Mattel announced in October of HIT Entertainment.

News Business Reporter Matt Glynn contributed to this report.