UPDATE 3-Hasbro shares jump on overseas growth, holiday optimism

Mon Oct 21, 2013 11:34am EDT
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By Dhanya Skariachan

Oct 21 (Reuters) - Toymaker Hasbro Inc topped Wall Street profit and sales estimates on Monday as strong overseas demand helped offset weakness at home, sending its shares to a new high.

Hasbro, the No. 2 U.S. toymaker, said it believes it can garner "more than its fair share" of holiday-season sales, even with a more challenging consumer environment, as it rolls out new games, focuses on brands that are selling well, and works with retailers on promotions.

Both Hasbro and larger rival Mattel Inc, which also beat analysts' expectations for the third quarter, are gearing up for the holidays, the biggest selling period of the year.

Shares of Hasbro, known for brands such as Monopoly, Nerf and My Little Pony, were up 6.6 percent at $50.41 after hitting a new high of $51.68. Mattel shares rose 0.5 percent to $42.91.

Hasbro should also benefit from Transformers and Spider-Man movies in 2014 and from Star Wars and Avengers movies in 2015, analysts said, as the company has toys linked to those films. Mattel has "good prospects, but it doesn't have as clearly visible a catalyst for sustained revenue growth as Hasbro has," said Needham & Co analyst Sean McGowan.

Hasbro's U.S. business is "poised for future growth" with work being done on the company's brands as well as the upcoming entertainment launches, Chief Executive Brian Goldner said during a conference call. Also, the Big Hugs Elmo toy that debuted this year is "off to a strong start," he said.

Hasbro has been trying to do a better job of managing its U.S. business. As part of that push, and the push by retailers to keep inventory in check, Hasbro's inventory at its top four U.S. retailers was down in the quarter.   Continued...