Disney expects Cars merchandise to top Toy Story

WASHINGTON Thu Jun 9, 2011 5:25pm EDT

WASHINGTON (Reuters) - Walt Disney Co's "Cars" is poised to become the company's largest film licensing property with the upcoming release of the franchise's second installment, a top executive said on Thursday.

"Cars 2" debuts in U.S. theaters June 24. Merchandise began hitting stores globally in mid-May and is on track to beat retail sales from mega-hit "Toy Story 3," said Andy Mooney, head of Disney's consumer products division.

"Cars" products will be offered "in every conceivable category that will enable it be the largest licensee program in history," Mooney told reporters during a webcast.

The Oscar-nominated "Toy Story 3" brought in more than $2.4 billion in retail sales in 2011, according to License! Global, a publication that tracks licensing deals. Disney gets a portion of retail merchandise sales, but does not disclose how much.

Miller Tabak analyst David Joyce said it was realistic for "Cars" to top "Toy Story 3."

"They're still selling Cars 1 (merchandise) that leads into 2," Joyce said. The original "Cars" was released in 2006.

Disney partners are producing a plehtora of "Cars"-themed products from toys and clothing to food. Mattel Inc, for example, is selling more than 150 "Cars 2" toys, while Williams-Sonoma Inc is launching aprons and mini cake-baking pans. Other partners include Nestle Ltd and Kimberly-Clark Corp.

The company plans to promote "Cars 2" into 2012 with a 12-acre "Cars Land" at a California theme park and a short-form "Cars Toons" shown as previews to animated films in theaters.

The "Toy Story" and "Cars" franchises were created by Pixar, the animation studio Disney bought in 2006.

Disney's consumer products division sells toys, clothing and other merchandise featuring characters from new films and classics such as Mickey Mouse. It accounts for more than 5 percent of annual revenue.

Products with Mickey Mouse and related characters remain popular, on track to generate $9 billion in global retail sales in fiscal 2011, Mooney also said. Mickey Mouse is the world's largest licensed character, Disney said.

Disney shares rose 0.4 percent to close at $39.37 on the New York Stock Exchange.

(Editing by Andre Grenon)