New York - Toy producers Mattel Inc and Hasbro Inc were bracing for one of the worst holiday sales seadons in a generation, saying Monday the squeeze of high costs and reduced consumption spell trouble for the coming months.

The world's two largest toy manufacturers posted slow sales. Mattel's third quarter sales trailed analysts' estimates, while Hasbro posted the slowest sales growth in seven quarters.

Mattel, which makes Barbie dolls and Elmo Live! furry red Muppet, said it may raise prices next year. Hasbro, which makes Transformers action figures and Monopoly games, is trying to entice buyers with a 180-dollar Furreal Friends Biscuit animatronic puppy.

"This year we are experiencing what is likely the worst economic crisis of my generation," Mattel Chief Executive Officer Robert Eckert was quoted as saying by Bloomberg financial news service.

Hasbro's third-quarter profit fell to 55.9 per cent of sales from 57.4 per cent the previous year.

Last year, Hasbro earned 40 per cent of its annual net income during the fourth quarter while Mattel earned 55 per cent. (dpa)