Toys Out Of The Attic

Hasbro, Inc. and Mattel, Inc. reported strong international sales of its toys in the second quarter 2011.

Hasbro noted its international segment revenues grew 43% to $374.5 million with growth in every major geographic region while US and Canada revenues were up 14% to $505.0 million. Transformers tie-in toys proved to be the big seller. The company repurchased a total of 2.4 million shares of common stock during the second quarter 2011 at a total cost of $112.0 million and an average price of $45.80 per share. For the first two quarters in 2011, the Company repurchased a total of 3.8 million shares at a total cost of $175.7 million and an average price of $45.69. At quarter-end, $474.5 million remained available under the current share repurchase authorization.

Mattel noted international sales increased 23% while US revenue rose only 7%. Total revenue rose 14% to $1.16 billion. Cars 2 tie-in and revitallized Barbie sales helped boost revenue. The company repurchased approximately 5.8 million shares of its common stock at a cost of approximately $152 million.

Whether this can be sustained remains to be seen. Both companies are dependent on Chinese production -- Global Trade Information Services notes China makes 64% of all toys exported in 2010 -- and costs are rising. US retailers are also proving gunshy when it comes to restocking shelves. The weak US dollar is also helping international sales, and any strengthening may disrupt gains. Finally, the US economy is still struggling and no matter how loud kids scream, toys remain purchases in need of discretionary income.