Shop Talk
Retailers, consumers and prices
Check Out Line: Parents back to buying toys
Check out strong quarterly results from Hasbro.
The No. 2 toymaker behind Mattel said quarterly net profit nearly tripled while revenue jumped 8.2 percent. The maker of Littlest Pet Shop said it got the biggest boost from girls and preschoolers, with sales jumping 16 percent and 18 percent respectively.
Some of the gain came from favorable currency exchange rates, but even excluding that factor, revenue was up 5 percent. Mattel also posted stronger-than-expected quarterly results.
Sales of products for boys only rose 3 percent, but Hasbro is expecting more gains from toys tied to the releases of two movies — “Iron Man 2″ and “Toy Story 3″ — this year. Its lineup for 2012 is stronger, with “Stretch Armstrong,” “Battleship,” “The First Avenger: Captain America” and “Spider-Man 4″ movies all slated for release that year.
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Check Out Line: Barbie and friends sell well
Check out the stronger-than-anticipated results from Mattel.
The toy giant notched a 12 percent jump in sales and a surprise profit in its latest quarter, sending a strong signal that toys are getting year-round attention, not just a holiday season boost.
Barbie’s sales rose 5 percent and some newer items, such as the World Wresting Entertainment and Thomas and Friends collections, were very good sellers, Mattel said. (That’s Triple H showing off his WWE action figure at Toy Fair earlier this year)
American Girl dolls and accessories posted a 6 percent rise in sales, suggesting even pricey goods are back in style.
Mattel’s strength came on the heels of U.S. retailers posting a stellar month of sales growth. Even Canada’s MEGA Brands, which posted a loss last month, said its sales rose for the first time since the first quarter of 2007. Are consumers back for good? We’ll get another dose of data when Mattel’s main rival, Hasbro, issues its results on Monday.
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Check Out Line: Earnings encouraging, but still hard to peg
Check out how hard it is to figure out how well the economy is progressing, based on the earnings of consumer goods companies.
Toymaker Hasbro had a stellar fourth quarter, handily beating Wall Street’s expert forecasts, and said it expected its streak to continue in 2010. Hasbro got a lift from toys tied in with the hit “Transformers” movie and is expected to get even more help from characters such as Elmo, Cookie Monster and Big Bird under a 10-year deal signed last month with the Sesame Workshop.
On the other hand, drugstore chain CVS Caremark also reported better than expected profits ,but its sales fell short of Wall Street. Still, CVS did much better at its stores open at least a year than rival Walgreen, which posted back to back sales drops in December and January.
Also in the basket:
- Barnes & Noble’s Nook finally in stores this week - Zale hoping for some love on Valentine’s Day
(Reuters photo)
Check Out Line: A quarterly update from toyland
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.
What’s hot in toyland this holiday season
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)
Toys “R” Us issues holiday “hot toys” list
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
I agree with Jane, the list is biased a bit. However, looking at some other sites like http://www.TopChristmasToysThisYear.com and Amazon, there are some that are on both lists.
Either way, this Christmas season is going to be tight for some Americans, which is why I think inventory is lower than past years.
I predict that eBay will be the place to go to get that hard to find Christmas toy this year.
Check Out Line: Toy shares still best bet?
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.
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Meet Bernie Madoff at the 2009 Toy Fair
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.
The bobblehead is cute but I’m thinking they need to come up with some type of Knock your Block Off toy.
Check Out Line: Cooking up meager profits
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)
Hasbro joins 2009 race to snag shoppers
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)
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