Media Advisory - BMO Announces Top 10 Toys for the Holiday Season and U.S. Toy Industry Outlook

• Pop Pops Snotz from Yulu, L.O.L. Surprise! O.M.G. Dolls from MGA Entertainment, and Blume dolls from Skyrocket forecasted as top three toys of the season
• BMO analysts lowering full year U.S. toy retail sales estimate to -2% from flat
• BMO Economics forecasts slower, but still healthy, U.S. consumer spending through the holiday season

TORONTO and NEW YORK, Nov. 27, 2019 /CNW/ - BMO Capital Markets Toys and Leisure analyst Gerrick Johnson has unveiled his annual list of the top toys for the holiday season, and outlook for the retail toy sector.

2019 Holiday Top 10
(Note, this list was compiled before the launch of new Baby Yoda toys, which would have also made the list. Mr. Johnson also notes the majority of the toys are USD $15 or under.)

#1 Pop Pops Snotz from Yulu (<$10)
#2 L.O.L. Surprise! O.M.G. Dolls from MGA Entertainment ($27)
#3 Blume dolls from Skyrocket (<$10)
#4 Juno My Baby Elephant from Spin Master ($100)
#5 X-Power Dozer from JAKKS Pacific ($50)
#6 Pinkfong Baby Shark Official Song Puppet from WowWee ($15)
#7 Hot Wheels Mario Kart die-cast vehicles and track sets from Mattel (<$10)
#8 The Heroes of Goo Jit Zu from Moose Toys (<$10)
#9 Buttheads figures from WowWee (<$10)
#10 Princess dolls inspired by Disney's "Ralph Breaks the Internet" from Hasbro ($15)

BMO analyst Gerrick Johnson and 2019's Toy Scout Report forecast the following trends ahead of the U.S. holiday season:

• Full year U.S. toy retail sales estimate lowered to -2% from flat.
• The industry is down -5.5% through the first nine months of the year, a bigger decline than BMO analysts were anticipating.
• BMO analysts have observed a slow start to fourth quarter retail. One headwind is the aggressive promotions that occurred in the early part of the fourth quarter of 2018 when retailers scrambled to attract the 15% of the market up for grabs after the departure of Toys "R" Us from certain markets. Comparisons get easier going forward and retail sales should pick up momentum.
• The shift to online shopping is the biggest contributor to the compression being observed in the holiday shopping season.
• Like last year, there's no breakout hot product to drive traffic to stores or online, but Hasbro's Baby Yoda plushies may fill that void.

"While retailers have generally reported good news for the quarter ended October, retail toy sales thus far in the fourth quarter have been slower than anticipated," wrote Gerrick Johnson, BMO Capital Markets Toy and Leisure analyst in the 2019 Toy Scout Report. "A risk to fourth quarter financial results is the change in the way U.S. retailers are being fulfilled by their toy vendors. The toy retail selling season continues to compress, with more and more direct fulfillment. This means more inventory risk is pushed to the toy makers we follow. With plenty of product currently at retail, and a significant amount likely parked in stateside warehouses, we think retail sales need to pick up sharply or else liquidations at the end of the quarter could wipe out a lot of margin."

BMO Capital Markets' senior economist Jennifer Lee notes that consumer spending, after a strong spring and summer, is expected to slow in the fourth quarter, but to a still-healthy 2% rate. Consumption may have been pared back given ongoing concerns about trade wars and recession chatter which sparked up in the fall. But, spending will have the broader support from low interest rates, rising real estate values and record high stock markets, and, most importantly, a strong labor market.

To arrange an interview with BMO Capital Markets' Gerrick Johnson or Jennifer Lee, or to access the Toy Scout Report, please contact BMO Media Relations.

About BMO Capital Markets
BMO Capital Markets is a leading, full-service North American-based financial services provider offering corporate, institutional and government clients access to a complete range of products and services including equity and debt underwriting, corporate lending and project financing, mergers and acquisitions advisory services, securitization, treasury management, market risk management, debt and equity research and institutional sales and trading. With approximately 2,700 professionals in 33 locations around the world, including 19 offices in North America, BMO Capital Markets works proactively with clients to provide innovative and integrated financial solutions.

BMO Capital Markets is a member of BMO Financial Group (NYSE, TSX: BMO) one of the largest diversified financial services providers in North America with $839 billion total assets as at July 31, 2019.

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SOURCE BMO Financial Group

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