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)

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 the quarterly profit from Mattel.

The world’s top toymaker posted a higher-than-expected quarterly profit but it wasn’t driven by consumers clamoring for its toys.

Instead, it cut costs to make up for a dearth of toys based on summer movies and the impact of foreign exchange.

Profit for Mattel, the owner of Hot Wheels and Barbie, rose to $21.5 million, or 6 cents a share, in the second quarter from $11.8 million, or 3 cents a share, a year earlier.

But sales fell 19 percent to $898.2 million. The impact of currency exchange rates accounted for 5 percentage points of the decline.

Worldwide Barbie sales fell 15 percent, hurt mostly by lower overseas sales.

While both Mattel and rival Hasbro are battling lower demand in the recession, Hasbro is ahead in the movie-based segment this year with toys linked to summer films such as “Transformers - Revenge of the Fallen” and “G.I. Joe - The Rise of the Cobra.”

To offset slumping sales, Mattel has cut 1,000 jobs, shaved corporate travel expenses and taken steps to trim advertising and distribution costs in past months. In the past quarter, it cut roughly $91 million of costs in areas such as administration and advertising.

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(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.

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(Photo/Reuters)

Check Out the losses at Mattel, the world’s biggest toy company.

The maker of Barbie said its first-quarter loss widened and CEO Robert Eckert said Mattel would keep controlling costs as tough market conditions test the resilience of toy companies.

But one area where Mattel has not scrimped is on its worldwide campaign to spotlight Barbie, its 50-year-old flagship doll, which has suffered months of weak sales as children’s taste in toys change. 

Those steps included a fashion show in New York, unveiling a six-story flagship store in Shanghai, a party in Malibu, California, and selling special designs of Barbie dolls.

Its efforts seem to be reaping some early benefits. 

Worldwide Barbie sales fell 5 percent in the first quarter, less than its overall sales decline, while sales increased in the double digit range in the domestic market. 

“Clearly, retailers have made room for Barbie in an otherwise difficult environment,” Wedbush Morgan Securities analyst Chris White said.  “Retailers have been persuaded that Barbie looks good enough to take a chance on.”

(Additional reporting by Aarthi Sivaraman)

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(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 Island of Misfit Toy Earnings.
 
Mattel bumped along like a train with square wheels in the fourth quarter, posting a 46 percent drop in earnings for the quarter that includes the key holiday selling season.
 
Sales fell 11 percent, a particularly bad sign given the idea that parents would sacrifice shopping for themselves in order to buy toys for their children during the holidays.
 
Granted, part of the sales decline was due to the rising dollar, which hurts the value of sales outside the United States.
 
But U.S. sales also fell 6 percent. And Barbie is really sagging, with a 21 percent drop in sales. Maybe her age is showing. She does hit 50 this year.
 
“Our business wasn’t immune from the deteriorating economic environment of 2008,” CEO Robert Eckert said in a statement.
 
Rival toymaker Hasbro will report next week. But at least it has that Monopoly money to cover any shortfalls.
 
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(Photo: Reuters)

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)

Hold on to your Bratz dolls.

A rival to the more demure Barbie, and one of the more fashionable dolls in the market, the Bratz may not be on store shelves from early next year.

A California judge ruled late Wednesday that Bratz owner MGA Entertainment should stop selling the dolls and banned it from using the toy’s name, handing rival and Barbie maker Mattel Inc its biggest victory yet in a years-long legal fight over the Bratz dolls, which pushed Barbie out of the limelight soon after their launch in 2001.

The court battle was marked by testimonies from both Mattel CEO Bob Eckert and MGA CEO Isaac Larian, and more recently, the dismissal of one of the jurors who a judge found to have made racial remarks during deliberations about Larian, an Iranian Jewish immigrant.

For Mattel, the latest ruling is good news. But for MGA, which plans to appeal the ruling immediately, the future look bleak if it has to abandon the toy line, which rakes in more than $1 billion in annual sales according to Larian.

And for consumers — there is still hope that you will be able to own one of these dolls. The injunction issued to MGA has been stayed until after the holiday sales season.

So head out and bring Jade, Yasmin, Sasha or Cloe home. They may be valuable in a few years.

(Photo/Reuters)