Sears Expands Toy Shops
Sears opened new Toy Shops within 79 of its existing stores last weekend. The Toy Shops expanded into four new markets: Minneapolis, Philadelphia, San Diego, and Washington D.C. Additionally, new Toy Shops will be added in the Chicago, Los Angeles, New York, and San Francisco markets, where the retailer opened 20 pilot Toy Shops last year.
“The consumer response to our Toy Shops that were launched last year was so strong that we wanted to extend them to more families in more markets,” said Dev Mukherjee, president of seasonal & toys, Sears Holdings, in a statement. “Sears is committed to providing parents with the tools, guidance, and toy selection they need to foster play within their households. We have also made our toys shops as play friendly as possible by adding interactive displays and even a kid-sized hot air balloon to delight our youngest customers.”
The Sears Toy Shops carry top toy brands such as Fisher-Price, LeapFrog, Hasbro, and Vtech to unique products from specialty brands such as Schylling, Thomas Wooden Railway, Gund, My First Annabelle, Madame Alexander, and more. Customers also have the opportunity to choose from Sears exclusive brands such as My First Craftsman, My First Kenmore, and Just Kidz. Visit www.sears.com/toyshop to shop online or find a store location near you.
Mattel Reports Third Quarter Results
Mattel, Inc., reported 2010 third quarter financial results. For the quarter, the company reported net income of $283.3 million, or $0.77 per share, compared to last year’s third quarter net income of $229.8 million, or $0.63 per share.
For the quarter, net sales were $1.83 billion, up 2 percent compared to $1.79 billion last year, including unfavorable changes in currency exchange rates of 3 percentage points. On a regional basis, third quarter gross sales increased 3 percent in the U.S. and increased 2 percent in international markets, including unfavorable changes in currency exchange rates of 7 percentage points. Operating income for the quarter was $358.6 million, compared to prior year’s operating income for the quarter of $336.5 million.
Consistent with the seasonality of the business, year-to-date, net cash flow used for operating activities was approximately $428 million, an increase of $109 million, compared with a use of approximately $319 million in the first nine months of 2009, primarily due to lower factoring of receivables in 2010.
Looking at the results by brand for the third quarter, worldwide gross sales for the Mattel Girls & Boys Brands business unit were $1.17 billion, up 8 percent versus a year ago. Worldwide gross sales for the Barbie brand grew 6 percent compared to last year. Worldwide gross sales for Other Girls Brands were up 7 percent, driven primarily by strong performance of the Disney Princess doll line and the introduction of the Monster High doll line. Worldwide gross sales for the Wheels category, which includes the Hot Wheels, Matchbox, and Tyco R/C brands, were down 5 percent. Worldwide gross sales for the Entertainment business, which includes Radica and Games and Puzzles, increased by 23 percent for the quarter, mostly attributable to growth in the Toy Story 3 and World Wrestling Entertainment properties.
Third quarter worldwide gross sales for the Fisher-Price Brands business unit were $743.4 million, or down 5 percent versus the prior year, primarily due to declines in Fisher-Price Core and Power Wheels, which offset gains in Fisher-Price Friends, primarily driven by products supporting evergreen entertainment properties such as Thomas & Friends and the new product introduction of Sing-A-Ma-Jigs.
Third quarter gross sales for the American Girl Brands business unit were $84.4 million, up 2 percent versus last year, reflecting the benefit of the opening of two new boutique stores in Denver and Kansas City and the retiring of historical character, Felicity, to the American Girl Archives, as well as the launch of the My American Girl line, a repositioning of the contemporary line featuring a doll configurator and virtual world.
Hasbro Reports Third Quarter Results
Hasbro reported its results for third quarter 2010. Net revenues grew 3 percent to $1.31 billion compared to $1.28 billion a year ago. Excluding the negative $16.2 million impact of foreign exchange, net revenues grew 4 percent. Net earnings grew 3 percent to $155.2 million, or $1.09 per diluted share, compared to $150.4 million or $0.99 per diluted share a year ago.
Worldwide net revenues grew in three of the four major product categories. The Preschool category grew 9 percent to $184.7 million; the Boys product category increased 4 percent to $472.3 million; and the Games and Puzzles category increased 2 percent to $387 million; while the Girls category declined 1 percent to $269.1 million.
U.S. and Canada segment net revenues grew 4 percent to $825.5 million compared to $791.9 million in 2009. The results reflect growth in the Boys, Preschool and Games & Puzzles categories that more than offset a decline in the Girls category. The U.S. and Canada segment reported an operating profit of $158.8 million up 23 percent compared to $129.1 million in 2009.
International segment net revenues increased 3 percent to $458.9 million compared to $444.1 million in 2009. Revenues in the International segment grew 7 percent absent a $17.8 million negative foreign exchange impact. The International segment operating profit grew 10 percent to $70.8 million compared to $64.1 million in 2009.
Entertainment and Licensing segment net revenues were $27.5 million compared to $41.6 million in 2009. The results primarily reflect a decline in Transformers and G.I. Joe movie-related revenue. The Entertainment and Licensing segment reported an operating profit of $5.9 million compared to $19.8 million in 2009. The Hub, Hasbro’s joint venture television network with Discovery Communications, launched on 10-10-10.
Hasbro repurchased a total of 6.1 million shares of common stock during the third quarter of 2010 at a total cost of $260.1 million and an average price of $42.39 per share. For the first three quarters of 2010, the company repurchased a total of 15.6 million shares of common stock at a total cost of $629.2 million and an average price of $40.32 per share. As of quarter end, $157.5 million remained in the company’s current share repurchase authorization. During the first half of 2010, the company issued 11.6 million shares of common stock in connection with the redemption of its convertible debentures, which were called in April 2010.