-- Net revenues were down 2% for the quarter, however, lower S, D & A expenses contributed to year over year earnings improvement;

-- MY LITTLE PONY, DUEL MASTERS, TRIVIAL PURSUIT brand and NERF all strong performers;

-- New product launches including VIDEONOW COLOR, LAZER TAG, TV MISSION: PAINTBALL and WEEBLES all doing well;

-- Significant debt reduction and increasing cash over the last 12 months strengthens the balance sheet.

Hasbro, Inc. today reported third quarter results. Worldwide net revenues for the quarter were $947.3 million compared to $971.1 million a year ago and included a $17 million positive impact from foreign exchange. Earnings for the quarter were $88.7 million or $0.45 per diluted share, compared to $85.8 million or $0.48 per diluted share in 2003, before cumulative effect of accounting change. In accordance with accounting rules, reported diluted earnings per share for the 2004 results exclude the favorable earnings impact of the $5.2 million adjustment to fair value of the Lucas warrants. The Company also reported third quarter Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) of $168.6 million compared to $170.3 million in 2003. The attached schedules provide a reconciliation of EBITDA to net earnings for the respective periods of 2004 and 2003.

Alfred J. Verrecchia, President and Chief Executive Officer, said, "Our plan this year has been to grow both revenues and earnings. In that context, we view our third quarter top-line performance as disappointing. With the difficult revenue comparisons, a challenging retail environment and continued softness in our boys business - it was clearly more difficult to grow revenue than anticipated.

"As we look out at the remainder of the year, we remain confident in our ability to grow earnings and we continue to believe we will achieve our goal of delivering an operating margin of 12% or better by 2005. However, given our top line performance year-to-date and the uncertain retail environment, it is increasingly unlikely that we will achieve our goal of revenue growth for 2004," Verrecchia concluded.

David Hargreaves, Chief Financial Officer, added, "This past quarter earnings improved despite the $65.3 million reduction in BEYBLADE revenue. Our success here is due in part to delivering on our commitment to take $200 million in costs out of the business over the past three plus years. In the third quarter S, D & A expenses were down 10% as compared to the third quarter of last year.

"Along with implementing our cost reduction programs, we have continued to focus on generating cash flow and paying down debt, resulting in a $215.9 million reduction in long-term debt during the last twelve months and interest expense being down 34% for the quarter," Hargreaves concluded.

Revenues in the U.S. Toys segment were $369.7 million for the quarter compared to $377.3 million a year ago, reflecting an overall softness in the boys business, including a year over year decline of $30.4 million in revenue from BEYBLADE. The segment reported an operating profit of $20.8 million for the quarter compared to an operating profit of $45.8 million last year, reflecting lower sales and a decline in gross margin.

Revenues in the Games segment were $236.5 million for the quarter compared to $250.2 million a year ago, primarily reflecting a decline in trading card games, including one less release this year of MAGIC: THE GATHERING. The segment experienced growth in the electronic, adult game and pre-school categories. The Games segment reported operating profit of $46.4 million compared to an operating profit of $58.3 million last year, reflecting lower sales and a decline in gross margin.

International segment revenues were $331.6 million for the quarter compared to $328.1 million a year ago. The segment had a number of core brands that performed well, including MY LITTLE PONY, PLAYSKOOL and DUEL MASTERS. Offsetting growth in core brands was a decline of approximately $34.9 million in revenue related to BEYBLADE. The International segment reported an operating profit of $48.8 million compared to an operating profit of $38.5 million a year ago.

Hasbro is a worldwide leader in children's and family leisure time entertainment products and services, including the design, manufacture and marketing of games and toys ranging from traditional to high-tech. Both internationally and in the U.S., its PLAYSKOOL, TONKA, MILTON BRADLEY, PARKER BROTHERS, TIGER, and WIZARDS OF THE COAST brands and products provide the highest quality and most recognizable play experiences in the world.