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tdp2664 InvestorPlace Since 80% of American consumers' now believe we're in a recession , it's white-knuckle time for the retail industry, which desperately needs strong holiday sales. But while Scrooge may haunt the hopes of many Christmas presents, one sector has proven itself resilient in bad times: toys. And that’s good news for big manufacturers like Mattel ( NASDAQ : MAT ) and Hasbro ( NASDAQ : HAS ) this holiday season. Make no mistake, it's looking pretty grim for retail in general: Industry research firm ShopperTrak on Wednesday predicted November and December sales will rise only 3% — down from last year's 4.1%. But parents traditionally have been willing to sacrifice for their kids, so toy sales fared better than the rest of the retail industry during the recession. HAS and MAT have been forced to increase prices this year to offset higher production and raw materials costs, which could encounter resistance from consumers. So which company is best positioned to win the starring role in this season's toy story? Recent Earnings Mattel's second-quarter earnings increased 56% to $80.5 million. MAT, which next reports earnings on Oct. 14, grew sales by 14% to $1.16 billion. Barbie sales alone rose 12%, while Hot Wheels sales slipped 2%. Hasbro's second-quarter earnings were up 33% to $58.1 million. HAS, which next reports earnings on Oct. 17, grew sales by 23% to $908.5 million. Driven by Transformers, boys' toy sales rose 96% to $406.4 million, while girls toy sales declined 11% to $119.1 million. Girls vs. Boys Barbie might be 52, but she still reigns as Mattel's prom queen, helping MAT post its greatest second-quarter growth in more than 10 years: 12%. The company's entire girls portfolio is dominant, particularly Disney Princess and Monster High. Mattel's tie-in with Disney/Pixar's Cars 2 is so far outperforming Toy Story 3 . Hasbro's boys brands lead the pack with Paramount's Transformers: Dark of the Moon . Beyblade, Marvel and Tonka also are performing well. HAS also reinvented My Little Pony with its "Friendship is Magic" series last year. One big concern: The company's game and puzzle revenues are down and HAS still is clearing out 2010 inventory.
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