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Mattel and Hasbro 'terrified': Do kids want gadgets more than toys?

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“The top two guys, Mattel and Hasbro, they are terrified,” Sean McGowan, managing director of equity research at Needham & Company, told the Financial Times. “They should be terrified, but the official party line is they’re not terrified.”

On Tuesday, the International Council of Shopping Centers and Goldman Sachs Weekly Chain Store Sales Index showed sales rose only 0.7 percent in the week ended Saturday.

The estimates are still preliminary and focus on sales, not profits. A handful of retailers will post sales data next week, but most, including heavyweights like Wal-Mart, will not report results at the register until they release financial results in mid-February.

Analysts have also said many retailers entered the season with inventories under control, which could help protect margins.

Still, the latest holiday season sales could end up the weakest since 2008, during the last recession, when sales dropped 4.4 percent in November and December.

"The broad brush was Christmas wasn't all that merry for retailers, and you have to ask what those margins look like if the top line didn't meet their expectations," said Kim Forrest, senior equity research analyst at Fort Pitt Capital Group in Pittsburgh.

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