Pawtucket, R.I.,,Mon Oct 22, 2012 – Hasbro Inc. topped Wall Street profit expectations on Monday as better inventory management helped offset weak sales at the second-largest U.S. toymaker.
The news came after larger rival Mattel Inc. also reported a higher-than-expected quarterly profit, helped by price increases and cost controls. The maker of Barbie dolls and Hot Wheels cars said it was well-positioned for the holidays.
Hasbro, whose brands include Monopoly, G.I. Joe, Nerf and Mr. Potato Head, has been working with its U.S. retail partners to better manage inventories this year. It has been trying to shift toy deliveries closer to peak demand periods.
It struggled during the 2011 holiday season when demand in the United States and Canada tapered off after a strong start to what is typically the biggest selling season of the year.
On Monday, Hasbro CFO Deborah Thomas said it plans to step up its marketing efforts in what she described as “an environment of significantly lower U.S. retail inventory.”
The toymaker said it expects to “grow revenues and earnings per share” for the full year 2012, excluding the impact of foreign exchange.
Net profit in the third quarter fell to $164.9 million, or $1.24 a share, from $171.0 million, or $1.27 per share, a year earlier. Analysts on average expected $1.20 per share, according to Thomson Reuters I/B/E/S.
The weakening euro zone is the “most significant” risk to the company’s 2013 outlook, executives said. In an interview with CNBC, Oberhelman said, though, that China appeared “to be on the edge of something of a recovery.”
Shares fell 1.1 percent to $82.92 in premarket trading.
For the third quarter, the company posted profit of $1.7 billion, or $2.54 per share, compared with $1.14 billion, or $1.71 per share, in the year-ago period.
Excluding one-time items, the company earned $2.26 per share. By that measure, analysts expected $2.22, according to Thomson Reuters I/B/E/S.