LeapFrog to boost ad spending ahead of holiday season

Mon Nov 5, 2012 7:34pm EST

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(Reuters) - Children's toy maker LeapFrog Enterprises Inc (LF.N) raised its full-year forecast and said it will increase its advertising spending to attract more shoppers during the upcoming holiday season.

Shares of the company, known for its interactive reading systems, educational games, books and learning toys, rose 8 percent in after-hours trading. The stock closed at $9.57 on Monday on the New York Stock Exchange.

LeapFrog expects to increase its ad spending by 20 percent to 25 percent in the fourth quarter, compared with last year.

The company has been benefiting from its trademark tablets meant for children, and said it was well stocked for the current quarter.

The company's $99.99 LeapPad 2 Explorer, a tablet aimed at children between 3 and 9, is one of the 'most wanted' toys for the holiday season.

Rivals such as Toys R Us Inc TOY.UL are also stepping up their efforts to lure shoppers during the key holiday season.

Toy R Us's tablet, the Tabeo, which sells for $149.99, is loaded with child-friendly apps and integrated controls that allow parents to customize levels of Internet access.

LeapFrog's net sales for the full year are now expected to be between $535 million and $550 million, up 18 to 21 percent from a year earlier.

The company had previously forecast a 13 to 15 percent jump in full-year sales.

Its profit rose to $41.7 million, or 60 cents per share, for the quarter ended September 30, from $23 million, or 35 cents per share, a year earlier.

Excluding items, the company earned 51 cents per share, according to Thomson Reuters I/B/E/S. Analysts on average had expected 42 cents.

Net sales rose 28 percent to $193.1 million, driven by sales of its new products and high demand for the LeapPad line, the company said. Analysts on average had expected $174.2 million.

(Reporting by Chris Jonathan Peters and Arpita Mukherjee in Bangalore; Editing by Maju Samuel)

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