Hasbro posted a smaller-than-expected drop in second-quarter sales on Thursday as steady digital gaming demand offset a slump in toy sales, while cost-control strategies helped the toymaker beat profit expectations.

Shares of the company were up 6% in premarket trading as Hasbro saw margins grow in the quarter to 21.3% compared with a 15.6% decline in margin a year earlier.

The Nerf toy gun maker's turnaround strategy to limit expenses and maintain a tight inventory amid an industrywide slowdown in toy demand has helped boost its performance.

The company's quarterly revenue dropped 18% to US$995.3 million , smaller than a 22.02% drop estimated by analysts, according to LSEG data.

On an adjusted basis, Hasbro earned US$1.22 per share in the second quarter, compared with estimates of 78 cents.

Hasbro now expects full-year revenue from its consumer products segment to be down 7% to 11%, compared with its February forecast of a 7% to 12% decline.

On Tuesday, Barbie maker Mattel topped Wall Street estimates for second-quarter profit, aided by a tight control on costs even as it posted a surprise drop in sales.

  - Reuters