NEW YORK (Reuters) - Hasbro Inc beat Wall Street quarterly profit forecasts, helped by its Star Wars and Playskool line of toys and bested rival Mattel Inc, whose profit fell short of expectations on higher costs.
Both companies were optimistic on the coming holiday sales season, which is expected to be rough as consumers back away from spending on non-essential items and seek bargains amid higher costs, job losses and a housing slump.
Mattel shares fell nearly 4 percent in pre-market trading.
Mattel, which owns such brands as Hot Wheels and Sesame Street’s Elmo, posted a net profit of $238.1 million, or 66 cents per share, compared with $236.8 million, or 61 cents per share, a year earlier.
Analysts, on average, had expected a profit of 71 cents per share, according to Reuters Estimates.
Mattel’s sales rose 6 percent to $1.95 billion, with currency benefits accounting for 2 percentage points of the gain. Sales rose 7 percent internationally and increased 4 percent in the United States.
Worldwide gross sales for Barbie, Mattel’s iconic doll line, fell 1 percent as declines overseas outstripped modest domestic growth, Mattel said.
Mattel Chief Executive Robert Eckert said he was confident the company’s holiday season toys would be popular enough and priced correctly to attract consumers.
This year, Hasbro has been a clear favorite with investors, with its stock up about 16 percent since January, while Mattel’s are down nearly 24 percent.
Mattel faces issues like high costs for a court battle with MGA Entertainment over rights to the Bratz dolls, strict product testing after a huge toy recall last year and commodities like plastic resin.
Both companies increased prices for their toys and games earlier this year as they tried to make up for higher costs.
Hasbro posted a net profit of $138.2 million, or 89 cents per share, in the fiscal third quarter, compared with a profit of $161.6 million or 95 cents per share a year earlier, when it reported a tax benefit of 17 cents a share.
Analysts had expected Hasbro to post a profit of 86 cents per share.
Sales rose about 6 percent to $1.3 billion, helped also by demand for its card and board games, as more consumers cut down on vacations and seek ways to entertain themselves at home in the face of tough economic times.
Hasbro’s U.S. and Canada sales rose 6 percent in the quarter, while international sales were up 9 percent, or 4 percent excluding the impact of foreign exchange rates.
Reporting by Aarthi Sivaraman; Editing by Lisa Von Ahn and Derek Caney
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