At Hasbro And Mattel, The Toys Are Back

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It looks like parents all over the world are relaxing back into their role as chief amusement officers: Both Hasbro and Mattel say first-quarter sales came in better than expected, and the outlook continues to brighten.

"Consumer spending will continue to do well for toys," Gerrick Johnson, an analyst who follows the toy industry for BMO Capital Markets, tells Marketing Daily."Whether times are tough or whether we're moving into a recovery, we still have cautiousness, and that means a lot of moms and dads are continuing to budget. Budgets are good for toys, because parents may cut back in other areas, but they won't scrimp on their kids."

Toy makers have also made it easier for parents by introducing toy lines with many different price points, says Jim Silver, editor in chief of timetoplaymag.com. "Take Lego's Star Wars -- there are $99 items, but there are price points at $10, $15, or $49," Silver tells Marketing Daily. " Parents can jump in anywhere. And it also helps that the stock market is improving -- people have more money."

Hasbro says its sales climbed 8% to $672.4 million for the first quarter, compared to $621.3 million a year ago (a 5% gain, excluding the impact of currency exchange.) Net income zoomed to $58.9 million, from $19.7 million in the same period a year ago. And while the Pawtucket, R.I.-based company says next quarter's comparisons will be tougher (last year, it had new products related to two movies, "Transformers" and "G.I. Joe"), "we continue to believe we should be able to grow revenues and earnings per share for the full year 2010."

Hasbro says sales increased in every major category, including a 3% gain in boys' toys; 16% gain in girls'; 7% gain in games and puzzles, and an 18% jump in preschool toys.

El Segundo, Calif.-based Mattel last week said worldwide sales jumped 12% to $880.1 million, as did sales in the U.S. For the quarter, the company reported net income of $24.8 million, compared to last year's first quarter net loss of $51.0 million. By division, the biggest gains came from Hot Wheels, up 9%, American Girl, up 6%, followed by Barbie and Fisher Price, both up 5%.

"Barbies had a bit of a makeover in the last 18 months or so, with the Princess line appealing to younger girls, the Fashionistas and Twilight Barbies appealing to older girls," as well as a wide range of updated accessories, Silver says. "Mattel has made Barbie cool again."

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