Hasbro Inc, the No. 2 US toy company, posted a lower quarterly profit that met Wall Street expectations, and said that the worst may be behind it.
Hasbro, much like its bigger rival Mattel Inc, faced a rough 2008 holiday sales season, as cash-strapped consumers spent less on toys in the recession.
But Hasbro, which makes Transformers action figures, Tonka trucks and Parker Brothers board games, said things may be getting better.
“Based on the strength of our product line, we believe the two most recent quarters will prove to have been the most challenging for Hasbro in this economic cycle,” said David Hargreaves, Hasbro's Chief Operating and Financial Officer, in a statement.
Net profit was $19.7 million, or 14 cents per share, in the first quarter, ended on March 29, down from $37.5 million, or 25 cents per share, a year earlier.
The results matched analysts’ average estimate, according to Reuters Estimates.
Aside from the stronger dollar, Hasbro blamed the reduction of retailers' inventories and this year's later Easter holiday, which pushed holiday-related sales into the second quarter.
Hasbro recently extended its royalty deal with media company Marvel Entertainment Inc to retain toy-licensing rights for its characters. The deal allows Hasbro to continue to make toys and games based on Marvel's portfolio of superhero characters like Spider-Man and Iron Man.
The company expects the movie releases of “Transformers: Revenge of the Fallen,” “G.I. Joe: Rise of the Cobra” and “X-Men Origins: Wolverine” to drive business in coming quarters. (Reuters)