Mattel Inc reported a lower quarterly profit that met Wall Street estimates on Friday, hurt by the weak economy and a dearth of movie-inspired toys.

As expected, revenues continue to be challenging this year due to the overall economic environment, retailers tightly managing inventory, foreign exchange rates and the lack of entertainment-inspired toy lines, said Robert Eckert, chief executive officer of the world's largest toy company, which makes Barbie dolls and Hot Wheels cars.

Still, Eckert said Mattel was making progress on reducing costs, improving margins and generating cash flow.

The company has shed jobs, cut expenses tied to corporate travel and taken steps to trim distribution and advertising costs. It has also managed inventory tightly.

Net profit in the third quarter fell to $229.8 million, or 63 cents a share, from $238.1 million, or 65 cents a share, a year earlier.

Analysts on average were expecting earnings of 63 cents a share, according to Thomson Reuters I/B/E/S.

Mattel, which also makes action figures and toys based on Walt Disney movies, said net sales fell 8 percent to $1.79 billion, with declines of 14 percent internationally and 2 percent in the United States.

Regarding its brands, worldwide sales fell 8 percent for Barbie and 4 percent for Fisher-Price, and rose 9 percent for Hot Wheels and 4 percent for American Girl.

As the toy industry gears up for the all-important holiday shopping season, key retailers Wal-Mart Stores Inc and Target Corp have already begun offering steep discounts to woo shoppers that are trying to spend less.

After a bruising holiday season in 2008, toy companies are focusing on making fewer and more affordable products.

The company's Barbie Fashionista doll is expected to be a hot seller this holiday.

Shares of Mattel, which moved its stock exchange listing to the Nasdaq last month, closed at $19.58 on Thursday.

(Reporting by Nivedita Bhattacharjee in Bangalore and Martinne Geller in New York)