Fight in the toy aisle
Toymakers Mattel and Hasbro are gearing up for their annual holiday showdown. But Mattel, which has been off its game, is using the season as a setup for next year’s expected comeback.
Mattel posted flat third-quarter revenue, as the nation’s largest toy company’s Barbie business rebounded and strong sales of its American Girl items offset the lost Walt Disney Princess and “Frozen” business that went to No. 2 Hasbro this year. Hasbro, helped by its new Disney pact, posted a 14 percent increase in quarterly revenue. Its Nerf brand and toys related to “Star Wars” should also keep sales strong. Mattel’s annual revenue should still be slightly down from last year’s $5.7 billion. But for 2017, it should see growth, say FactSet’s analysts. That growth should be driven by new tie-ins with retailers and its continued reinvention of Barbie. Hasbro, whose sales were $4.5 billion last year, is expected to enjoy solid growth this year and next year, but remain in second place. Shares of Mattel have risen 16 percent this year, hovering around $31; Hasbro’s shares are up 23 percent, trading around $83. “I’m pleased with what I am seeing with Mattel,” says Moody’s Linda Montag.