NEW YORK (AP) — Toys are increasingly making their way back into parents' budgets, Hasbro Inc.'s results showed Monday.
A big spike in sales of girls' toys and strong sales across the board helped Hasbro's first-quarter profit nearly triple.
Revenue from girls' toys, including Littlest Pet Shop, My Little Pony and Strawberry Shortcake, rose 16 percent.
The second-largest U.S. toymaker also said Monday that it is starting a $625 million share buyback program.
Shares rose to briefly reach a 52-week high of $40.77 before retreating.
Both Hasbro and Mattel Inc., the largest U.S. toy maker, reported strong first quarters, indicating parents are beginning to spend more on their children as fears about jobs and the economy ease. Toys are usually one of the first categories to recover after an economic downturn because many parents spend on their children before themselves.
BMO Capital Markets analyst Gerrick Johnson said that parents had held back buying toys during the recession when uncertainty about the economy was at its peak. Now consumers are still cautious, but they're adding room in their budgets to buy toys for children, he said.
"Now people know what their budgets are, and whenever parents are sticking to a budget I think this industry outperforms," he said.
Hasbro's profit climbed to $58.9 million, or 40 cents per share, in the three months ended March 28. That's up from $19.7 million, or 14 cents per share a year ago.
Excluding a tax adjustment, net income totaled 26 cents per share. Analysts expected a smaller profit of 16 cents per share excluding one-time items. Analyst estimates typically exclude one-time items.
Revenue rose 8 percent to $672.4 million. That tops analyst forecasts of revenue of $642.7 million.
The quarter "was another excellent quarter driven by contributions from a wide array of the Hasbro portfolio," said Wells Fargo Securities analyst Tim Condor.
CEO Brian Goldner said the year began with "positive consumer spending trends."
Goldner said sales Littlest Pet Shop toys, Monopoly game, Magic the Gathering game, Nerf and PlaySkool all grew in the quarter.
Other brands with higher revenue included Baby Alive dolls, Play-Doh, Tonka, Furreal Friends plush toys and Super Soaker water guns. Iron Man toys also sold well and could get a further boost from the May 7 opening of "Iron Man 2." .
He added that in the second quarter, results might be weaker this quarter compared with the same period last year, when shipments of toys tied to "Transformers: Revenge of the Fallen" and "G.I. Joe: The Rise of Cobra" were in stores.
However, he said that the company expects higher profit and revenue for the full year 2010.
Revenue from boys' toys rose 3 percent to $236.9 million. Games and puzzles revenue rose 7 percent to $227 million.
Girls' toys revenue rose to $129.4 million, and preschool toys grew 18 percent to $78.9 million.
U.S. and Canada revenue rose 5 percent to $424.7 million, while international revenue rose 17 percent to $221.7 million.
Traditional toy makers face tough competition as children increasingly reach for electronics such as the iPod and video games for entertainment. Hasbro, based in Pawtucket, R.I., has countered that by developing electronic versions of its classic games such as Scrabble and Monopoly.
The company is also a partner with Discovery Communications in new children's television network, "The Hub," launching Oct. 10.
The network already has 317 hours of television programming in development and production, Goldner said.
Hasbro has also found success with movie tie-ins. Hasbro expects strong sales from toys tied to "Transformers 3," to open July 1, 2011, and "Stretch Armstrong," scheduled for summer 2012.
Hasbro shares rose 60 cents to $40.45. Mattel shares fell 17 cents to $23.67.