Barbie, American Girl drive Mattel's holiday win

DETROIT – Mattel Inc, the No. 1 toy company, staked its claim as the winner of the holiday shopping season as strong demand for its core Barbie and American Girl brands helped quarterly earnings beat expectations.
The company also said rising costs of oil and Chinese labor would entail price increases in 2011, but analysts questioned whether consumers will accept them in a sluggish economy.
"They did better than their competitors, and the signals coming out of the retailers weren't entirely positive about the holiday season," said Ted Moore, portfolio manager with Fifth Third Asset Management, which owns Mattel shares. "They picked up market share, not dramatically, but a solid quarter all the way around."
Mattel's better-than-expected results and rising inventories come just weeks after smaller rivals Hasbro Inc and LeapFrog Enterprises Inc said sales had slowed late in the biggest selling season of the year.
BMO Capital Markets analyst Gerrick Johnson said Mattel had gained share and was looking strong to continue its momentum.
"Yeah, fourth quarter's good; they bucked the trend of weakness," said Johnson, who has an "outperform" rating on the shares. "These guys made their numbers and are set up really nicely for 2011."
Johnson cited strong new product launches like Monster High and Sing-A-Ma-Jig and a good performance by Barbie. The new products all sold out in the fourth quarter, and were measured in tens of millions of dollars in 2010, but will grow to hundreds of millions of dollars this year.
"We gained market share in virtually every one of the (industry) segments -- dolls, vehicles, action figures, games, infant and preschool," Chief Executive Officer Robert Eckert told analysts on a conference call.
Mattel's fourth-quarter net profit was $325.2 million, or 89 cents a share, compared with $328.4 million, or 89 cents a share, a ...