Mattel's Sing-a-ma-jigs Find YouTube Fame as Toys Reach Shelves‏

Bloomberg

Mattel Inc.’s newest singing toys are already rising stars on the Internet.

Sing-a-ma-jigs, plush animals that chatter and harmonize, have been popping up on Youtube.com as retailers add them to store shelves. In one homemade video, a man sings a duet of “When the Saints Go Marching In” with a blue Sing-a-ma-jig. In another, a stuffed toy puppy cuddles with a red Sing-a-ma-jig after a rendition of “Where Oh Where Has My Little Dog Gone.”

Mattel is relying on that word-of-song to promote the toys instead of an advertising campaign, and said in June that it doubled production. Since then the El Segundo, California-based toymaker increased the number of Sing-a-ma-jigs “a little bit more” as sales show momentum, said Gina Sirard, vice president of marketing for Mattel.

“We’ve had to go to a few different vendors in Hong Kong to fill the demand that we currently have,” Sirard said in a telephone interview. “There seem to be signs that would point to the fact that this is going to do very well for the holiday season.”

Mattel, also the maker of the Barbie and Fisher-Price toys, is eyeing a bigger piece of holiday sales, which account for about 40 percent of the $21.5 billion annual U.S. toy market, according to researcher NPD Group Inc. in Port Washington, New York. Mattel had 2009 revenue of $5.43 billion and doesn’t break out sales for individual products.

Toys “R” Us

Sing-a-ma-jigs, which Mattel started selling in February at 25 Toys “R” Us locations for $12.99 each, will be a strong contender for the retailer’s Holiday Hot Toy List to be released later this year, said Bob Friedland, a spokesman for Toys “R” Us. The dolls are now also available at Wal-Mart Stores Inc., Target Corp. and Kmart.

“They have the potential to be one of the hottest products of the year,” said Chris Byrne, a New York-based toy-industry analyst and director of content at TimetoPlayMag.com. “It’s got all of those components that give you a couple of minutes of laughter and fun.”

For the holiday season, Sing-a-ma-jigs may surpass the popularity of Zhu Zhu Pets, the Cepia LLC robotic toy hamsters that sold out last season, Byrne said.

Sing-a-ma-jigs are currently available in four colors and tunes, including a pink doll that sings “Skip to My Lou” and yellow one that belts out “Home on the Range.” The toys, whose terrycloth mouths open to reveal a set of teeth, say hello and start babbling when squeezed. They harmonize when pressed simultaneously, encouraging shoppers to buy more than one.

Mattel plans eight more Sing-a-ma-jigs leading up to the holiday season. The toys will sing songs such as “For He’s a Jolly Good Fellow,” “This Little Light of Mine,” and “A- Tisket A-Tasket,” Mattel’s Sirard said.

'Toy Story 3' a Smash for Mattel as well as Pixar

Associated Press

 

Parents snapped up toys tied to the box-office smash "Toy Story 3" in spring and early summer, helping Mattel's second-quarter net income more than double. But the toymaker sounded a cautious note for the holiday season and shares fell.

The maker of Barbie and Hot Wheels said Friday its net income rose to $51.6 million, or 14 cents per share, from $21.5 million, or 6 cents per share last year. That just missed analyst expectations for net income of 15 cents per share, according to a poll by Thomson Reuters.

It was the first time Mattel hasn't beat or matched expectations in five quarters. Also, the company reiterated that it expects rising costs in the second half of the year. Shares fell 7 percent in midday trading.

Revenue remained strong, up 13 percent to $1.02 billion, matching analyst expectations. A year ago revenue was $898.2 million.

CEO Robert A. Eckert said sales of Barbie and Hot Wheels were strong and said toys tied into Pixar's "Toy Story 3" made a "stellar contribution" to the quarter.

"With the all important second-half of the year ahead of us, I am encouraged by the strong momentum of our product line," he said.

Still, he said he expects retailers will remain cautious when ordering toys for the holidays.

"Retailers continue to be tight on inventory, that's not surprising to us," Eckert said. "Similar to last year, people are going to be cautious and they tend to buy what they're selling as opposed to buying a lot in advance of selling."

Mattel, based in El Segundo, Calif., has experienced a resurgence in strength in its classic brands such as Barbie and Hot Wheels. Barbie revenue rose 6 percent and Hot Wheels 11 percent. Its new licenses to make toys tied to preschool stalwart "Thomas and Friends" and World Wrestling Entertainment have been strong as well. Mattel also just introduced a new product line, "Monster High" which features toys tied to a group of teens who are descended from famous monsters that go to high school together.

Other toys it is hoping will be hits for the holidays include a $49.99 Barbie doll that has a video camera inside and lets kids record video and watch it on an LCD screen on the doll's back; Dance Star Mickey, a $69.99 doll that dances and sings; and Matchbox's $59.99 Stinky the Garbage Truck, a toy truck that moves and talks.

As the company heads into the second half of the year, including the crucial holiday season that accounts for up to half of toymakers' annual revenue, it is facing rising costs for commodities like oil and resin, the primary material used in plastic, and is dealing with rising wages in China.

Mattel said price increases in 2011 will be "more likely than not," given what is going on with the supply chain.

The company, which is in the middle of a cost-cutting plan, said it expects to be on the high end of its guidance of saving $180 million to $200 million in 2010.

Standard & Poor's analyst Erik Kolb said in a note to investors that operating costs were higher than he expected and he has concerns about rising production costs in the second half of the year.

He lowered his opinion on Mattel to "Hold" from "Buy."

But some analysts suggested the decline might be a good opportunity.

Stern Agee & Leach analyst Margaret Whitfield said the delay of "Toy Story 3" in Europe — pushed back because of the World Cup — may have hindered some revenue that investors were expecting in the second quarter, but that will help third quarter revenue, she said.

Chief rival Hasbro reports second-quarter results on Monday.

Barbie, Thomas and Friends drive Mattel 1Q Profit

NEW YORK (AP) - Much like the characters in the "Toy Story" movies, sales of a broad array of Mattel toys burst to life in the first quarter.

Mattel Inc. got a boost from new toy lines like Thomas and Friends and World Wrestling Entertainment, and such standbys as Barbie also performed well, leading the toy maker to post a surprise profit.

The strong results point to the fact that toy sales - which held up better than those of many other products during the recession - are recovering more quickly as well.

"Toys always hold up better than other segments within retail, and retail activity in general seems to have improved," said Sterne, Agee & Leach analyst Margaret Whitfield. "There's a sense that consumers are coming out of hiding."

The No. 1 U.S. toy maker also has a strong lineup this year compared with previous years, Whitfield said.

Mattel's classic brands performed well. Barbie sales rose 5 percent - the second straight quarterly increase for the 50-year-old fashion icon after nearly two years of decline. Drivers included the career-themed "I Can Be" line, the Barbie Basic "Little Black Dress" line and a spring Barbie that comes with a mermaid tail.

Sales of Hot Wheels rose 9 percent, and John Deere toys are hot again.

Mattel's newly licensed toy lines showed strength as well. WWE and "Toy Story" helped sales in Mattel's entertainment division rise 35 percent. The "Toy Story 3" movie is set to open during the summer, and that's likely to get shoppers buying.

Fisher Price sales rose 5 percent, helped by the Thomas and Friends line, and American Girl sales rose 6 percent.

Overall, Mattel, the No. 1 U.S. toy maker, earned $24.8 million, or 7 cents per share, for the three months ended Mach 31. That compares with a loss of $51 million, or 14 cents per share, a year earlier. Analysts polled by Thomson Reuters, on average, had expected a loss of 3 cents per share.

Revenue rose 12 percent to $880.1 million. That was well above the $859.9 million analysts predicted.

CEO Bob Eckert said he expects the new toy lines to remain strong.

"We expect them to perform more akin to evergreen toy brands rather than one-hit wonders," he said.

The sales growth, significantly better than the company's 1 percent revenue increase in the fourth quarter, may indicate that shoppers are beginning to spend money again on nonessentials and becoming more confident in the economy recovery.

On Wednesday the Commerce Department said March retail sales rose 1.6 percent, up from 0.5 percent in February. That was better than most economists had predicted.

Still, after spending a year slashing inventory during the consumer spending cutback that began in late 2008, many retailers remain cautious and are buying what they need rather than building up inventory, Eckert said.

"In essence, retailers bought what they sold this year," Eckert said. "We're still seeing inventories a bit below the prior year, and I've seen some studies that suggest broadly and that is not just toys and not just in the U.S."

Mattel said in the second half of the year, it expects higher costs for commodities like oil and minimum wage pressure in China, but said it will raise prices if it needs to.

Mattel, based in El Segundo, Calif., also cut costs during the quarter, lowering other selling and administrative expenses to $292.5 million from $317 million.

In the past year Mattel has cut jobs, improved its supply chain, reduced the number of items in development and slashed capital spending to offset sluggish sales as part of a plan to save $180 million to $200 million in 2010.

Rival Hasbro Inc. will report its quarterly results Monday.

Shares rose 60 cents to $24.35 trading, after briefly touching a 52-week high of $24.60.