Check out Mattel reporting a smaller-than-expected decline in third-quarter revenue as the toymaker sees gains in its Hot Wheels and American Girl brands.

Profit fell to $229.8 million, or 63 cents a share, from $238.1 million, or 65 cents a share, a year earlier.  Net sales fell 8 percent to $1.79 billion.  Analysts expected revenue of $1.78 billion.

Chief Executive Robert Eckert said Mattel’s revenue was still under pressure due to the weak economy, a move by retailers to tightly manage inventory and a dearth of toy lines tied to movies and other entertainment.

“That said, we are continuing to make strong progress on reducing costs, rebuilding margins and generating strong cash flow,” he said in a statement.

Mattel and rival Hasbro are facing another tough holiday as key retailers Wal-Mart and Target have already begun offering steep discounts on their products to woo shoppers.

After a bruising holiday season in 2008, toy companies are making fewer and more affordable products, such as those that cost less than $30. Mattel’s Barbie “Fashionista” doll is expected to be a hot seller this holiday.  It sells for $11.99 at Toys R Us.

Hasbro will report earnings on Monday morning.

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(Photo: Reuters)