The US toy industry is stabilizing, Hasbro, Inc. (HAS.US) and Mattel, Inc. (MAT.US) are expected to be winners during the holiday season.

The US toy industry is feeling optimistic, believing that holiday sales may exceed expectations. After a period of decline and concerns over consumer discretionary spending, toy sales have recently shown signs of stabilizing. In the first half of this year, US toy industry sales in US dollars remained relatively stable, decreasing by only 0.4% compared to the same period in 2023. This is a significant improvement from the 8% decline in 2023. By the third quarter, the US toy market showed signs of improvement, with sales in US dollars flat compared to the same period, volume down by 0.5%, and average selling price increasing by 0.5%. It is worth noting that toy sales are still 37% higher than the same period in 2019, equivalent to a $4.5 billion increase. As the holiday season approaches, certain categories of toys are showing particularly strong momentum, such as building sets, exploration toys, and toy cars. Gummy candies top the list of best-selling products, while trading cards are leading sales of new products. Jefferies Financial Group Inc. stated that after conducting a final channel check before Christmas, the company is becoming increasingly optimistic about toy sales overall. Analyst Kylie Cohu pointed out that compared to the beginning of the holiday season, toys are looking very popular and inventory is much lower. Cohu added, "Based on our research, we have noticed that board games are selling particularly well both in physical stores and online. Discounts have also been continuously declining from the peak levels of Black Friday." Third-party data tracking agencies also indicate that overall toy sales may exceed expectations. It is worth noting that the toy sections of Walmart Inc. and Target Corporation stores have been empty, which may be a good sign for other toy manufacturers and retail giants. Reports indicate that there has been an increase in demand for LEGO sets, Walt Disney Company's Bitzee interactive toys, Mattel, Inc.'s Hot Wheels and Barbie dolls, as well as Sony and Microsoft Corporation video game consoles since Black Friday and Cyber Monday. The US toy industry is expected to achieve growth by 2025, with several positive indicators shaping the market outlook. By 2024, the global toy market is estimated to reach around $335.6 billion, with forecasts showing continued expansion. Regional dynamics show that North America remains the market leader, while the Asia-Pacific region is expected to grow at a compound annual growth rate of 5.1%, with China and India being key markets. Online retail channels are expected to rapidly expand, with a compound annual growth rate of 5.1%. In terms of related concept stocks, Hasbro, Inc. rose by 11.2% in 2024, while Mattel, Inc. fell by 5.5% and The Pacific by 23.4%. Based on quantitative analysis, Hasbro, Inc. and Mattel, Inc. have both received buy ratings, while The Pacific has been given a hold rating.