The first-quarter net loss widened to $51 million, or 14 cents per share, from $46.6 million, or 13 cents per share, a year earlier.
Analysts on average expected a loss of 13 cents a share, according to Reuters Estimates.
Quarterly sales fell 15 percent to $785.6 million, including the impact of the stronger dollar, which reduces the value of overseas sales, Mattel said.
As even indulgent parents cut back on toys for their children in the face of the recession, retailers have been reducing their inventory to avoid deep discounts and to prevent ending up with excess merchandise.
(Reporting by Aarthi Sivaraman; Editing by Lisa Von Ahn)