LeapFrog Enterprises, Inc. (LF)

love the products but this here is a TRADE

This company seems to have a bad habit of losing money, but they are losing it at a slower rate... I guess that's a positive? I'm going off a friend's recommendation, and trying my best not to cringe.

No overpriced educational toys this holiday season...this company is going NO WHERE at least until 2010

What a dog this has been for me. I think I only bought it because I have kids and I have high hopes for the new products. That said, everything I hear is that the new products are good. My plan is to hold this dog and hope that it gets a boost this year from new products and next year from (I hope) an improving retail market. Lot of hopes in this play...

Why Not

sinking

Overpriced and losing money fast.

Leap Frog is a great childrens toy company (and I know given I have two small children of my own). Leap Frog's focus on educational children toys: digital interactive, educational videos, and reading books are the kind of toy products that good parents like to give their children. Current share prices and recent lackluster performance have caused overselling all caused by the economic downturn, but I have little dought this company will not regain solid earnings and remain a market leader in educational toy products into the future. Oh...and I just love the Letter Factory video, as so do my kids. What, what, what's happening dude!

LF
BIG

Christmas is coming and parents/grandparents love giving children "learning" toys and Leapfrog products are well designed and are great gifts......

because Cramer said to buy it a year and a half ago and I did.Now i am stuck with a dud!

sd

I believe Barron's Magazine put it best when they said "There is no way to cost-cut your way through declining revenue," which holds true for LF, after revenues decline once again at a 15% clip.

Sales will deteriorate further due to slowing economic conditions, competition, and product whose quality remains suspect.

Yes, margins may have improved as well as a reduction losses. HOWEVER, this is just a postitive spin on losses that will continue at a significantly lower rate of revenue.

At the same time (in this economic climate) the product quality remains more than suspect, along with any reason to believe that sales will magically improve...Any marked improvement would be realized at the end of next year, IF then.

This product appeals to parents more than to children. With the economy tight--parents are going to look for toys that serve a dual purpose in their child's life.

LeapFrog is still in a turn-around phase. Results will not be clear until after fall of 2007 when consumer acceptance of new products is known.

Poor product execution. Poor management. Poor company.

Leap Frog makes quality toys that sell good and are liked. With the hiring of new execs the company could pull themselves up with good management.

LeapFrog Enterprises, Inc., formerly known as Knowledge Kids Enterprises, Inc., was founded in 1995. It is one of the leading designer, developer, and marketer of innovative, technology-based educational products and related proprietary content. The company offers consumer products that fall into four main categories: book-based, screen-based, FLY, and stand-alone products. The FLY branded products like FLY Pentop Computer has been accredited with the Most Innovative Toy and Best Educational Toy awards.

Educational toys are the fastest growing segment of the toy market. Heavy promotion of electronic learning and its educational benefits has led to the expansion of the electronic learning market, boosting sales for the birth-to-three year age group by 9%. However, overall market in the same period has witnessed a growth of 14% in 2005.

Despite expanding market, the company has witnessed a huge fall, and the margins and sales have nosedived. This dip can largely be contributed to the poor performance of the company’s major brand, LeapPad, whose sales dipped by 60%. All this has made the company adopt various measures; however, it would not reap benefits for the company until 2008.

Moreover, high competition from companies like Mattel, Inc. and Hasbro, Inc. has led to decline in shelf space for the LeapFrog products in major retail stores like Toys “R” US, Mart, and Target that account for over 79% of the net sales in the U.S.

LeapFrog is taking drastic measures of reinventions like layoffs, product eliminations, overseas expansion, etc. The company has also appointed a new CEO who has a background in the airline industry. Though the makeover looks good on paper, it would not be able to attract investors to venture in the company’s stocks in near future.