You can slap a smile on Mr. Potatohead. Hasbro (NYSE:HAS) is doing just fine. The toymaker reported an improved holiday quarter, with earnings before a one-time repatriation tax growing from $0.44 a share to $0.61 a share.

Revenues inched a mere 1% higher, but it was a case of several segments going in different directions. The company's stateside toy division was strong, thanks to Star Wars-licensed toys and the Furby revival, although there was weakness in its trading cards and its traditional board game business.

Hasbro also had to deal with a strengthening dollar. If it were not for currency exchange rates, Hasbro's top line would have grown by a little more than 3% for the December quarter.

The report came a week after Mattel (NYSE:MAT) charmed the market by handily beating market expectations with its own quarterly report. Hasbro has followed suit, topping Wall Street's consensus estimate for the period by three pennies a share.

This bodes well for smaller toymakers like Jakks Pacific (NASDAQ:JAKK) and RC2 (NASDAQ:RCRC), which will report their holiday-quarter earnings later this month. With high-end video game systems either in low supply or still a holiday season away, it seems as if the makers of traditional playthings cleaned house like elves in a toyshop.

Shares of Hasbro are up by 43% since they were recommended to Motley Fool Stock Advisor subscribers nearly three years ago. That's certainly a respectable return, given Hasbro's conservative risk profile. There's little reason to doubt that Hasbro won't be around in five, 10, or even 20 years. There will always be children, and there are always more toys to be made.

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Longtime Fool contributor Rick Munarriz has more than a few Hasbro games around the house. He does not own shares in any of the companies mentioned in this story. The Fool has a disclosure policy. Rick is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early.