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.

Also in the basket:

Cadbury looks for sweet Q3 to deter Kraft

Office Depot CEO worried about small U.S. businesses

Tesco sets goal to be zero-carbon business by 2050

Louboutin Fetes Barbie at 50 (WWD, subscription required)

(Photo: Reuters)

As retailers gear up for the all-important holiday season, two industry veterans predicted what would be hot in toy land this year.

Looking at the ‘hot toys” list from Jim Silver and Christopher Byrne of toy Web site TimetoPlayMag.com, it appears that even indulgent parents still don’t want to pay too much for a toy — with the exception of the Beatles Rock Band video game.

That could put pressure on toy makers and retailers who have been cutting down on inventory and focusing on making and selling affordable toys to please consumers.

The push may be vital, given the 2008 holiday season turned into one of the worst in nearly 40 years as the economic crisis bore down on shoppers.

The complete “hot toys” list includes:

Mattel’s Barbie Fashionistas dolls, Rocky the Robot truck, and the tween Dora, Crayola’s Crayon Town, Hasbro’s Candy Land Sweet Celebration game, a Nerf blaster gun and Transformers Constructicon Devastator battle vehicle, Cepia’s Zhu Zhu Pets hamsters, Bakugan 7-in-1 Maxus Helios playing cards and characters, MEGA brands’ Battle Strikers, Techno Source’s Printies, Spin Master’s Air Hogs Switchblade flyer, Jakks Pacific Eyeclops Night Vision Goggles and Girl Gourmet Sweet Candy Jewelry Factory, Lego’s Star Wars and the Beatles Rock Band video game.

(Photo/Reuters)

It’s that time of the year again.

Specialty toy retailer Toys “R” Us issued its take on what this holiday season’s hot toys will be, as it prepares to attract toy shoppers one year after what was the worst holiday sales season in nearly 40 years.

This year, retailers and toy makers alike have focused keenly on prices, understanding that consumers may not be prepared to shell out hundreds of dollars for toys since caution rules their spending.

The Toys “R” Us list this year includes a mind-control game by Mattel called Mindflex, Disney’s netbook Netpaland Hasbro’s Transformers: Revenge of the Fallen Constructicon Devastator action figures.

But who knows what parents will choose this year as prices remain on top of their minds.

Here’s Toys “R” Us’ “Fabulous 15″ in the group of 36 hot toys:

Bakugan Battle Brawlers New Vestroia Maxus Helios 7 in 1 from Spin Master
ChixOs Pink Design-A-Luxury Loft from Spin Master
Color Me a Song from Crayola Beginnings
Disney Netpal
Disney•Pixar Toy Story Interactive Buddies Talking Action Figures (Buzz and Woody) from Thinkway
Disney Princess: Just One Kiss Princess Tiana Doll from Mattel
Fast Lane JLX Over Drive Radio Control All Terrain Vehicle from Toys”R”Us
Laugh & Learn Learning Farm from Fisher-Price
Little Mommy Baby Ah-Choo from Fisher-Price
Mindflex from Mattel
NERF N-Strike Raider Rapid Fire CS-35 from Hasbro
Star Wars Fan’s Choice Anniversary Edition Home One Mon Calamari Star Cruiser from LEGO
Transformers;revenge of the Fallen Constructicon Devastator from Hasbro
Wii Sports Resort from Nintendo
Zhu Zhu Pets Hamster from Cepia

(Photo/Reuters)

Check Out this analyst’s view on the toy sector.

Tim Conder, an analyst with Wells Fargo Securities, said toy shares continue to offer the best “risk/reward” as those in his coverage, like Mattel, Hasbro and RC2 Corp, continue to gain relative market share.

“Despite on-going consolidation among retailers and investor concern about growing major retailer ‘clout’  via pricing pressure and private label toys, major toy manufacturers have gained share. Why?” Conder asked in his note.

The answer could be –  ”(1) Financial staying power, (2) Uninterrupted supply chains while 2nd/3rd tier vendors had issues during the peak of the credit freeze, (3) Licensed/owned brands that major retailers need to draw consumers (e.g., Barbie, Transformers, Star Wars, Spiderman, Thomas & Friends, Sesame Street, John Deere), and (4) Dependable consistency to deliver globally as major retailers expand,” Conder said.

Conder’s positive take on toy makers comes ahead of major earnings reports that begin this week with No. 1 toy maker Mattel, followed by rival Hasbro early next week.

Also in the basket:

Vodka maker CEDC to offer 5.5 mln common shares

Philips sees early signs of recovery, boosting shares

Japan’s Suntory considering merger with Kirin

Kellwood continues to negotiate upcoming maturity

Trade group challenges Wal-Mart on health care (WSJ - subscription required)

(Photo/Reuters)

Now that we have your attention — it’s a Bernie Madoff action figure.

Modelworks, a company that makes models of anything from planes to action figures is expected to unveil its version of Madoff, an accused perpetrator of a $50 billion investment scam, at the 2009 Toy Fair in New York’s Jacob Javits Center, the Toy Industry Association said on its website.

Mr. Madoff will not be alone. The 2009 American International Toy Fair from Feb. 15-18 will host toy makers from Mattel to Lego  and hundreds of retailers who will carefully pick toys to put on store shelves in 2009.

Gone are the days where lead and safety issues took center stage. Its all about the price of toys and their value, analysts told us this week. That means no more toys for hundreds of dollars, as even the most free-handed parents sacrifice buying costly toys for their children to save money.

Mattel, for instance is selling Elmo again this year with a twist – you can wear gloves modeled after the character’s fuzzy red fur and use it to tickle your friend. All for about half the price of the Elmo Live doll Mattel sold last year.

Or there is Hasbro, which is seeking to attract kids with a $28 puppy, whereas last year, one of its star toys was the nearly $180 Biscuit, a bigger animated pup.

The Madoff action figure, however, was born as a way to help his friend, an irate Madoff victim, feel a little better, said creator Graeme Warring. The figure, which is made to look like a devil, also comes with a hammer that can be used to “pulverize Bernie,” the website says.  Warring eventually ended up making a couple more such figures for others and is unveiling it widely at the Toy Fair.

(Photo from Mini-Me by Modelworks website)

Check out the falling profits at Whirlpool and Hasbro.
 
Whether the ovens you make cook with gas like Whirlpool’s or with a light bulb like Hasbro’s Easy-Bake, it’s hard to make much money when people don’t want to buy anything.
 
Whirlpool profit fell 76 percent in the fourth quarter as sales in North America dropped 18 percent. The world’s biggest appliance maker also said it expected industrywide shipments of appliances to fall 10 percent in 2009.
 
Hasbro, which makes littler appliances, as well as G.I. Joes and Transformers, saw a 30 percent drop in quarterly profit as shoppers bought fewer toys for the holidays.
 
The company plans to focus on cutting costs this year, as are many, if not most companies in the United States. 
 
But wait, is that G.I. Joe coming to the rescue? A G.I. Joe movie this year is expected to help lift sales of the action figures and other toys Hasbro sells under those names.
 
Perhaps they can work some kitchen scenes into the script and help out Whirlpool. C’mon, at least a trash compactor to deal with the bad guys?
 
Also in the basket:
 
McDonald’s same-store sales rise
 
Saks upends luxury market with strategy to slash prices (WSJ)

(Reuters photo from 2002)

Want cheap entertainment? No problem.

Hasbro, the second-largest toymaker, thinks it has what cash-strapped shoppers need in 2009: A lineup of new card games priced at around $7.

They include Scrabble Slam and Monopoly Deal, which play off the original board games and aim to entertain stay-at-home consumers in a recession-mired economy.

Hasbro is dancing to the same tune that has swayed rival Mattel, the world’s top toy maker, to tout its moderately-priced toys.

Both companies will unveil their full 2009 lineups at the American International Toy Fair that kicks off on Feb. 15 in New York.

Under wraps until the event, but widely anticipated by analysts to bolster Hasbro’s sales this year, are Hasbro’s toys tied to the “Transformers - Revenge Of The Fallen” and “G.I. Joe -  The Rise of the Cobra” movies set to be released later.

(Photo/Reuters)

Consumers rejoicing at the gas pump in recent days may mean good news for retailers — at least that’s what the CEO for toy maker Hasbro is thinking.

In an interview after Hasbro — known for its Monopoly board game and My Little Pony toys — posted a third-quarter profit that beat Wall Street expectations, CEO Brian Goldner said one heartening outcome of the financial crisis was that crude oil prices have fallen in recent weeks, which has translated into lower prices at the pumps for consumers.

That means shoppers could have some extra cash in hand to buy, say, Hasbro’s $180 Furreal Friends toy pup called Biscuit. If that seems like a lot of cash to spend on a toy, Hasbro says it also has several items on offer for less than $20.

Goldner said sales of board games were up 7 percent in the quarter. Demand for titles like Scrabble, Trivial Pursuit, and Twister was strong as consumers cut down on road trips or vacations and looked for ways to entertain the whole family at home.

The company expects board games to do well in the holidays.

(Photo: Reuters)

Check out the holiday cheer coming from Hasbro’s CEO.
 
Remember when everyone said luxury stocks were more immune to a recession? That was before the housing slump, the credit crisis and the meltdown on Wall Street. Now the Dow Jones Luxury Index is down 52 percent from a year ago.
 
Remember when food companies said they were a little less vulnerable to an economic downturn because people still have to eat? Well, people still need to eat, but lower-priced store brands have been taking market share and food shares, as demonstrated by the Standard & Poor’s Packaged Foods index falling 11 percent in the past three weeks.
 
Well, now the next test case might be the idea that people will still keep spending on toys for their children during Christmas.

“We still believe that Christmas will come for consumers and retailers this year and our retailers have agreed that toys and games are more recession resistant than other discretionary spending categories,” Hasbro CEO Brian Goldner said during a conference call with analysts.
 
Hasbro beat analysts quarterly profit estimates, while higher costs caused Mattel to miss.
 
But what kind of Christmas will it be? Christmas came for the Cratchits in “A Christmas Carol,” but while it was full of good feeling and cheer, it was a tad light on presents, at least before Scrooge had his epiphany.
 
Will Christmas for toymakers be commercial, or Dickensian?
 
Also in the basket:
 
U.N. agency says crisis to cost 20 million jobs
 
Circuit City weighs broad cuts (WSJ, subscription required)
 
Adrenalina bids for PacSun (WWD, subscription required)

 (Reuters photo)

If the holiday season is around the corner (or even a little farther away), then it is that time of the year again — major toy retailers, childrens’ magazines and guides announce “hot” lists, predicting which toys and games will likely fly off store shelves during the holiday shopping period.

According to Toy Wishes magazine, girls who are 6 years old or older are likely to go after the Bratz “Girls Really Rock” line of dolls this time around.

Top U.S. toy maker Mattel and smaller, privately held MGA Entertainment have been locked in a legal battle over the Bratz dolls. The chic, snazzily dressed dolls started stealing market share from Mattel’s iconic and more clean-cut Barbie since the Bratz were introduced in 2001. While it is still undecided as to who has the right to make the dolls. Mattel most recently said that it has filed a motion to stop MGA from making or selling Bratz. That could spell bad news for MGA, given toy companies make a lion’s share of their revenue during the holiday season.

Also on the Toy Wishes list: Spin Master’s action-figure warriors Bakugan, Playskool’s dinosaur “Kota the Triceratops,” and Crayola’s Glow Station. Interestingly, Crayola spokeswoman Stacy Gabrielle said at a Toy Wishes event in New York that Crayola is trying to attract thrifty parents with lower-priced items this holiday season. The Glow Station can be purchased for $29.99. 

Just as well. With high prices for fuel and food, the credit crunch, a prolonged housing slump and the financial meltdown, how many parents will readily shell out $179.99 for a toy dog (Hasbro’s Furreal Friends Biscuit, My Lovin’ Pup) or $189.99 for a 15-string Cherry Harp?

Time will tell.

(Photo: Reuters)