April 24 (Reuters) - Hasbro ( HAS ) reported a

smaller-than-expected drop in first-quarter sales and handily

beat profit estimates on Wednesday, as leaner inventories and

steady digital gaming revenue helped cushion a drag from softer

demand for toys.

The Play-Doh maker has grappled with weakening demand over

the past year amid a pullback in discretionary spending and

tight inventory planning by mass retailers like Walmart and

Target.

However, efforts to clean up its inventory throughout 2023,

along with cost efficiencies, helped its operating margin expand

to 15.3%, from 1.8% last year.

Revenue for the Wizards of the Coast and Digital Gaming

segment grew 7% in the quarter, driven by the popularity of its

"Baldur's Gate III" and "Monopoly Go!" games.

The Nerf toy gun maker's quarterly revenue fell 24.3%, to

$757.3 million, smaller than the 26.2% drop to $738.6 million

estimated by analysts' on average, according to LSEG data.

On an adjusted basis, Hasbro ( HAS ) reported earnings per share

of 61 cents in the quarter ended March 31, compared to 1 cent

last year. Analysts on average had expected 27 cents per share.

The toy maker said it was on track to achieve the fiscal

2024 targets it set in February.

On Tuesday, Barbie maker Mattel ( MAT ) posted a

smaller-than-expected loss for the first quarter, helped by its

costs-saving measures.