Until major competitor, Hasbro – whose sales were up 14% in Q1, 2008 – Mattel posted a loss of $46.6 million … before you go blaming it on shortage of CARS, the problem is the Fisher Price division … sales in that division were down 13% percent

“Fisher-Price, Mattel’s education and preschool toy company, accounted for the brunt of the disappointment, with sales slipping 13% from the prior year to $341.3 million. The Fisher-Price Friends unit, which includes items like Elmo, Dora the Explorer and Sesame Street, reported a 49% decline as this year’s toys failed to attract as much attention as they did a year ago.

John Taylor, an analyst at Portland-based Arcadia Investment Corp., linked the drop to the current lack of an exciting Elmo toy and softening demand for Dora. “The magnitude was bigger-than-expected,” he said, but he added that Elmo Live, a new dancing toy to be introduced later this year, “has a chance to be another high point.”

Via the WSJ

We noted that costs were going up in this post but perhaps there’s another increase coming …

“Mattel added that it expects manufacturing costs to continue to rise in China as the yuan continues to gain on the dollar and as inflation in China nears the highest level in more than a decade. The toymaker said it may raise prices this year in the “mid-to-high single-digit range” to combat these forces.”

There was no specific mention of the Disney Pixar CARS …

The official press release on the earnings report is here.

An audio podcast of the conference call will be available tomorrow here.