For the second quarter, the company reported net income of $28.3 million, or 8 cents per share, compared to last year's profit of $73.3 million, or 21 cents per share.
Net sales were $1.06 billion, down 9 percent versus $1.17 billion in the same period a year ago.
Analysts polled by Thomson Reuters expected a profit of 18 cents a share and revenue of $1.19 billion.
Sales in the company's girls and boys brands category fell 13 percent to $689 million, as global Barbie sales were down 15 percent. The popular Wheels brand sales, which include Hot Wheels and Matchbox brands, were down 3 percent.
Fisher-Price revenue fell 17 percent to $328.8 million, while its American Girl category sales rose 6 percent to $83.1 million. Construction and arts and crafts sales, which includes the MEGA BLOKS and RoseArt brands acquired through its MEGA Brands purchase in April, were $61.6 million.
"While results for the quarter did not meet our expectations, we did see improving POS trends," said chairman and CEO Bryan G. Stockton.
"As we move into the second half of the year and the all-important holiday season, we need to drive POS higher by bringing innovative products to market, making additional advertising investments and optimizing the effectiveness of our marketing spend.”
On a regional basis, second quarter sales in North America, decreased 8 percent, while international sales fell 9 percent.
Gross margin narrowed to 46.4 percent from 51.3 percent in the second quarter of 2013.
At last check, shares of Mattel fell 6.3 percent to US$36.57 as of 11:27am ET in New York, dropping to as low as US$36.11 earlier in the session. The stock has a 52-week low of US$34.98.