Retailers encouraged by already-strong sales

Amid some lingering uncertainty, one challenge for stores is to keep profits high without jeopardizing sales. Selling out of products is good for profits, but stores’ goal is to sell out of goods close to Christmas Day, not earlier, which would hurt revenues, according to Madison Riley, a strategist at Kurt Salmon Associates, a consulting firm. He estimates that holiday inventories are up anywhere from 3 percent to 5 percent.

Riley noted that in apparel, an increasing number of stores are replacing the hot apparel items once they have sold out, with other fashion alternatives. That’s because they want to have their floors looking fresh.

Another issue is that no hot apparel items have emerged, according to Wendy Liebmann, president of WSL Strategic Retail, a New York-based consulting firm. But she believes that accessories like satchel bags and high-heeled boots will be winners.

But the toy business is a different matter — children don’t want a substitute for a hot toy. That’s why toy sellers are scrambling to get their hands on T.M.X. Elmo and other hot items that are beating sales projections. The good news is that goods are flowing smoothly through the U.S. ports, including the West Coast ports, according to Craig Sherman, NRF’s vice president of government affairs.

Jim Silver, editor-in-chief of Toy Wishes, a trade publication, estimates that Fisher-Price made about 700,000 T.M.X. Elmo units, and the company is scrambling to make more. Fisher-Price officials declined to comment. Silver noted other toys that may be in short supply are Speed Stacks, from Jakks-Pacific Inc. and Hasbro Inc.’s Butterscotch, a $299 life-size robotic pony.

Another hot item that analysts expect to be in limited supply this holiday season is Sony Corp.’s new generation console PlayStation3 when it hits stores Nov. 17.

Ed Schmults, CEO of FAO Schwarz, which carries toys not heavily distributed elsewhere, said that the retailer is already increasing its orders of the Eloise doll from Madame Alexander and Zizzle LLC’s 18-inch Jack Sparrow action figures related to the movie “Pirates of the Caribbean: Dead Man’s Chest.”

“Everyone is seeing a bit of a rosier picture,” said Ernie Speranza, chief marketing officer at KB Toys. “But it is still going to be a battle down to the wires, whether it is in pricing or availability.”

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