Star Wars Toys Give a Boost to Hasbro

Strong sales of Star Wars merchandise drove Hasbro Inc.’s fourth-quarter profit up 15%, exceeding Wall Street’s expectations.

But game sales declined nearly 13%, and the nation’s second-largest toy maker conceded Monday that it would face a tough challenge from a drop-off in Star Wars toy interest as last May’s release of “Star Wars: Episode III Revenge of the Sith” becomes a more-distant memory.

“We expect it to contribute meaningfully to our business this year and next year, but clearly not to the extent it has before,” said Alfred Verrecchia, chief executive and president of Pawtucket, R.I.-based Hasbro.

The top toy maker, El Segundo-based Mattel Inc., reported last week that its fourth-quarter profit slid 2% amid slumping sales of two of its top brands, Barbie and Hot Wheels.

Hasbro and Mattel face challenges to their top products as well as increased oil prices, which are driving up the cost of the plastic resin used in making toys. But Hasbro’s need to make up for declining Star Wars toy sales may put it in a tougher spot, said Sean McGowan, an analyst with Harris Nesbitt.

Shares of Hasbro fell 13 cents Monday to $20.62.

Hasbro said its net income was $94.3 million, or 48 cents a share, for the quarter ended Dec. 25, up from $81.9 million, or 44 cents, a year earlier.

Excluding the tax on the repatriation of foreign earnings, fourth-quarter earnings were $120.1 million, or 61 cents a share. On that basis, Hasbro beat the 58-cent-a-share average estimate of analysts surveyed by Thomson Financial.

Revenue rose 1.2% to $1.07 billion as domestic toy revenue grew 16%. Analysts had forecast quarterly revenue of $1.1 billion.