• by Sarah Mahoney  @mahoney_sarah, October 20, 2008

Both Mattel and Hasbro turned in sales increases for the third quarter, offering a peek into what may be the hot sellers for the critical holiday toy period.

At Hasbro, sales increased by 6% from the same period a year ago, to $1.3 billion. The Pawtucket, R.I.-based company--parent of Monopoly and Mr. Potato Head--says the gains were driven by strong performances from Star Wars, Playskool, Nerf and Furreal Friends, as well as gains in sales for Trivial Pursuit and Scrabble. It also posted a gain in earnings to $138.2 million, up from $132 million.

"We are very pleased with our third-quarter and year-to-date performance," the company says in its release. "In a challenging environment, we delivered both revenue and earnings growth. As we look to the remainder of the year, we are well-positioned with the richest and most diversified portfolio of brands in the industry."

And while Mattel also saw its sales increase 6% to $1.95 billion, there were signs of weaknesses as well, with sales of its Barbie franchise down 1% worldwide, despite modest domestic growth. Sales of its Hot Wheels toys also eased 1% worldwide.

But Fisher-Price continued to be strong--with sales up 7%--and at its American Girl division, sales are up 11%, thanks to products tied to the Kitt Kittredge movie.

"In light of the recent global economic environment, our business performed well in the quarter," the El Segundo, Calif.-based company says in its release. "The all-important holiday season, however, is ahead of us, and fortunately, we've got some of the industry's hottest toys that deliver terrific play value for both parent and child." Its income also gained a bit to $238.1 million, up from $236.8 million in the same period a year ago.

While both companies have plenty of entries poised to be big sellers this season--including Sesame Street's Elmo Live from Mattel and Furreal Friends Biscuit from Hasbro, both named to Toys"R"Us "Fabulous 15" toy list earlier this fall--industry experts are worried that toy sales may suffer as parents trim their holiday spending plans.

As a result, many retailers are focusing more on price. Toys"R"Us, for example, just unveiled its new holiday marketing campaign, "Where kids are a big deal," focusing on the chain's wide product assortment as well as exceptional values. And Toys"R"Us, Target, and Walmart have been pushing an extensive selection of toys priced at $10 or lower.