NEW YORK (AP) — Hasbro's profit fell 6 percent during the key holiday quarter as the toymaker faced a challenging economy and shifting habits in the way kids play.
The Pawtucket, R.I., company, which makes Monopoly and Nerf, had said last month that its revenue failed to meet expectations because of weaker-than-expected demand over the holidays. It plans to embark on a cost-savings program that would trim its workforce by about 10 percent and consolidate facilities.
Toymakers are facing a slowdown in developed markets such as the U.S. and Europe as mobile devices and electronics steal attention from toys. Making matters worse, the companies are more vulnerable to the weak economic climate because it's easier for people to cut back spending for dolls and games than for other things in their budgets.
In 2012 overall U.S. toy sales declined slightly to $16.5 billion from $16.6 billion, according to research firm the NPD Group.
Hasbro said Thursday that it will focus on understanding and reacting to the changing marketplace. For example, the company noted that the popularity of tablets presented a challenge as well as an opportunity.
Hasbro isn't the only toy maker that struggled during the holidays. Mattel Inc., the nation's largest toy manufacturer, last week reported fourth-quarter results short of analysts' expectations for the key holiday quarter. The maker of Barbie and Matchbox also said a litigation charge weighed on results and net income was down 17 percent.
For the October-to-December period, Hasbro Inc. earned $130.3 million, or 99 cents per share. That compares with $139.1 million, or $1.06 per share, in the year-ago period. Not including one-time restructuring charges, the company made $1.20 per share.
Revenue slipped to $1.28 billion from $1.33 billion.
Analysts on average expected profit of $1.18 per share on revenue of $1.32 billion.
Its cost-savings program resulted in charges of $36 million during the quarter. Hasbro says the program should save up to $100 million annually by 2015.
For the year net income was $336 million, or $2.55 per share, compared with $385.4 million, or $2.82 per share, in the year-ago period. Revenue fell 5 percent to $4.09 billion.
Net revenues in 2012 for the boys category decreased 13 percent to $1.58 billion, as declines in Transformers and Beyblade offset gains in Marvel-branded products, such as The Avengers and The Amazing Spider-Man.
Games sales increased by 2 percent to $1.19 billion, boosted by Magic: The Gathering, Twister and Battleship. In the girls category, sales for the year rose by 7 percent to $792.3 million, helped by Furby and My Little Pony.
Hasbro, which did not provide an outlook for 2013, declared a quarterly dividend of 40 cents per share, an increase of 4 cents, or 11 percent, from the previous dividend.
Hasbro shares fell 14 cents to $38.58 in after-hours trading.