Mattel Reportedly Warns Sales Could Miss Forecasts

In meetings with financial analysts this week, Mattel Inc. reportedly warned that its sales could fall $100 million below expectations for the year--which analysts said will probably crimp profit--because of a shortage in computer chips.

The company also hinted that it is not likely to renew licenses for the less profitable line of newer Walt Disney Co. products, produced by Mattel’s Entertainment unit.

Mattel did not offer information about the sale of its disastrous Learning Co. division, which last quarter lost $63 million. Mattel held meetings with financial analysts Tuesday and Wednesday in Scottsdale, Ariz., in advance of the company’s annual product presentation for retailers.

The toy maker reportedly told some analysts that computer chip delays have worsened, with shipments that used to be delivered in 15 to 30 days taking as long as 90 days.

These chip shortages could hurt Mattel’s Fisher-Price division, which relies on the components for 60% of its product line.

Although Mattel officials had said they expected to complete the Learning Co. sale by the end of September, some analysts hoped that the company would have news of a buyer at the meeting.

Problems at Learning Co. last year forced Mattel’s first loss in a decade, with a deficit of $82.3 million for the year, not including one-time charges.