Hasbro posts quarterly sales drop but cost savings prop margins

(Reuters) -Hasbro on Thursday posted a steeper-than-expected drop in sales for the third quarter as consumers tightened spending on toys, but the company’s stringent cost controls boosted margins.

Shares of the company were up 6% before the bell. The stock has gained nearly 38% this year.

Toymakers such as Mattel (NASDAQ:MAT) and Hasbro (NASDAQ:HAS) have focused on cost-savings this year to weather a slump in demand for toys.

Play-Doh parent Hasbro posted an adjusted margin of 25.7% for the quarter, up from last year’s 22.8%.

Revenue fell for the ninth straight quarter to $1.28 billion, compared with estimates for a 13.8% drop to $1.30 billion, according to data compiled by LSEG.

It expects full-year revenue from its consumer products segment to fall between 12% and 14%, compared with its prior forecast of a 7% to 11% decline.

Rival Mattel beat expectations for quarterly profit on Wednesday, even as it lowered its annual sales forecast heading into the crucial holiday shopping season.