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Leap Frog (NYSE:LF) reported another weak quarter, with EPS missing consensus by $0.13. Both International and Schoolhouse segment sales were down sharply, and while U.S. Consumer segment sales were up a solid 6%; they faced an easy comp of -5%. Sell through was reportedly stronger than sell in. Inventories were up 27% year/year and continue to look bloated, while retailers continue to work on reducing their own inventories.

AOL (NYSE:TWX) announced last Friday that it planed to offer to its instant-messaging users, a free phone number to use for incoming calls while charging users for initiating phone calls to traditional telephones. This new service competes directly with Skype (NASDAQ:EBAY), in our view. The level of competition in the VoIP industry has intensified over the past year with numerous new market entrants. However, Skype’s is unique in that it has monetization potential outside of charging for minutes, for example, the forthcoming pay per lead services and synergies derived through integration with eBay and PayPal.

Victoria's Secret, the Limited Brands (LTD) company known for sultry, slinky lingerie, is trying to give sports bras sex appeal. The chain, with comparable-store sales up just 1% last year, is looking to lift sales and give athletes a more flattering appearance with its Sexy Sport line, due in stores May 15. Its line aims to give some fashion edge to sports bras, known more for compressing than lifting and separating. Sexy Sport bras — priced from $35 to $45 — will come in trendy colors and eight versions, including a padded plunge and a convertible racer back.

Source: Rob Black's Retail Market Roundup For May 8 (EBAY, LF, LTD, TWX)