NEW YORK - There will be toys for kids this holiday season, but the fight for parents’ dollars looks to be a tough one for toy makers, which are facing rising costs amid the swooning economy.
Both Barbie maker Mattel Inc., the world’s largest toy retailer, and rival Hasbro Inc. said as they announced third-quarter results Monday that price increases are helping to offset rising costs, but noted that they could be hurt by the severity of the economic downturn.
“There will be a Christmas, and Mattel toys will be under the tree,” Bob Eckert, Mattel’s chairman and chief executive, said during a conference call with investors. “That said, I appreciate that some families may have to make choices this year when it comes to buying toys for their children.”
Mattel still expects toys such as Elmo Live and the Barbie Diamond Castle dolls that are tied to a DVD movie to do well this holiday season.
Hasbro is promoting toys such as the robotic animals Furreal Friends, but says it does not expect to sell as many higher-priced items as it does lower-priced ones such as action figures.
On Monday, Mattel posted a slightly higher third-quarter profit that still fell short of analyst expectations. Hasbro said its net profit declined, but said sales of its Star Wars, Playskool and Nerf toys helped boost third-quarter profit and sales above Wall Street expectations.
At Mattel, quarterly profit rose less than 1 percent to $238.1 million, or 66 cents per share, from $236.8 million, or 61 cents per share, last year.
Analysts polled by Thomson Reuters had expected 71 cents per share. Sales rose 6 percent to $1.95 billion, boosted by sales of its Fisher-Price and American Girl brands.
Meanwhile, chief rival Hasbro said profit for the quarter ended Sept. 28 fell nearly 15 percent to $138.2 million, or 89 cents per share, from $161.6 million, or 95 cents, a year ago.