By Matt Andrejczak
SAN FRANCISCO (Dow Jones) -- Hasbro Inc. reported Monday a 30%
decline in quarterly net income, as the holiday sales season proved
to be a disappointment and the dollar gained strength.
The world's No. 2 toy maker said it earned $93.6 million, or 62
cents a share, in the fourth quarter. In the year-earlier period,
Hasbro made $133.7 million, or 84 cents a share.
Sales fell 5% to $1.23 billion from $1.3 billion. Hasbro said
sales started to slow in October as weak consumer spending
exacerbated. To spur demand and help toy retailers avoid excess
shelf inventories, Hasbro worked with toy retailers to mark down
toys priced above $200 and slower-moving items, such as toys tied
to movies Indiana Jones and the Hulk.
Excluding the impact of the rising dollar against other global
currencies, Hasbro said sales would have risen 1%. Sales of Nerf,
Star Wars, Playskool, Littlest Pet Shop and Easy Bake were among
the strongest in the fourth quarter.
On Wall Street after the report, Hasbro shares rose 6% to $25.01
in early trading.
Chief Executive Brian Goldner said in a conference call the toy
maker's business will improve after March, when it begins to ship
toys for movies Transformers 2 and Wolverine and further expands
its digital-gaming partnership with Electronic Arts.
"As the year progresses, we would expect to see more momentum
around our major movie initiatives and as we roll out our many new
brand initiatives this fall" Goldner said.
Last week, toy rival Mattel rattled investors with news that its
profit fell 46% on weaker sales.
Even though toy companies have prevailed in past recessions, the
Mattel report seemed to show that the industry had a much tougher
time withstanding a massive slowdown in global consumer spending
the past several months. Toy factories in China have been shutting
down and mall-based retailer KB Toys is liquidating.
Mattel has said it will eliminate some product lines and cut
overhead costs.
On Tuesday, market-researcher NPD is expected to release a final
data on 2008 toy industry sales. U.S. sales are expected to decline
from the $22 billion made in 2007.
On Feb. 17, Hasbro plans to pay a quarterly 20 cent dividend to
shareholders of record Feb. 3.
The stock is down 3% over the past 12 months.