"The good thing for the toy manufacturers is that every year 80% of the skews are brand new skews, so it's a lot easier to put forth price increases through the retail channel than it is for companies that have the same products year in and year out," he said.
Mattel is "a little more susceptible to rising commodities prices and changes in Chinese labor, because they do a lot of their own manufacturing in China in their own plants," he said. "Hasbro outsources a lot of their production, so they have a little bit more stability in their gross margins."
So where should investors place their toy bets? Handler prefers Hasbro to Mattel in the long run.
"I continue to prefer Hasbro over Mattel just taking a two-year outlook in some of the media and entertainment ventures that Hasbro is going into in terms of their joint venture with Discovery with the Hub Cable network and the promotional capabilities," he said.
"Mattel near-term looks good. They did have good solid first-quarter numbers. They are set up well for the second quarter with "Cars 2," but I do like Hasbro much more over the long term."
Believe it or not, orders are being placed now for the holidays (Christmas is 253 days away), because the toymakers need the long lead time for manufacturing.
While retailers are hopeful for another strong Christmas, they don't want to be stuck with a lot of extra inventory. So right now they are being cautious with their orders — though that could change as the consumer continues to improve.