The company, like other US toymakers, was hit hard by the sooner-than-expected liquidation of Toys ‘R’ Us and had said it would get through the worst by the latter half of the year.

“We are focused on moving beyond the near-term disruption of losing a major customer, with a clear path forward including new retailer activations to meet the consumer demand made available by the Toys ‘R’ Us departure,” Chief Executive Officer Brian Goldner said in a statement. “(This year) is unfolding as expected.”

Hasbro has partnered with major media producers like Walt Disney to produce toys based on popular movie franchises like Star Wars and Marvel’s superheroes.

In its latest move to expand its brand portfolio, the company spent US$522 million (RM2.122 billion) in May to add characters from the superhero TV show Power Rangers to its line of products.

For the quarter, net earnings fell 11% to US$60.3 million (RM245.1 million), or US$0.48 (RM1.95) per share, but topped analysts’ average estimate of US$0.29 (RM1.18) per share.

The company’s overall revenue fell 7% to US$904.5 million (RM3.677 billion) in the quarter, but was nearly half the drop that analysts were expecting. Analysts on an average were estimating revenue of US$833.1 million (RM3.386 billion).

Revenue from Hasbro’s franchise brands segment, which makes Monopoly and Baby Alive and generates nearly half of its total revenue, fell 8%.

But the decline was much softer than the 30% drop anticipated by Linda Bolton Weiser, a D.A. Davidson analyst with a four-star rating.

The only segment to report a rise in revenue was the entertainment and licensing business, which rose nearly 26% to US$64.7 million (RM263 million) in the quarter.

“While product sales were weak in Q2, the benefits of entertainment and licensing was a meaningful offset,” Jefferies analyst Stephanie Wissink said in a note.

Shares of the Pawtucket, Rhode Island-based company, which was trading at US$104.90 (RM426.39) before the bell, were set to open at their highest in over five months.