By Savyata Mishra

(Reuters) -Hasbro surpassed Wall Street estimates for third-quarter profit as the Monopoly owner benefited from cost controls and strong digital gaming demand, even as weak consumer spending on toys hurt third-quarter sales.

Its revenue declined for a ninth straight quarter and fell short of Wall Street expectations, sending shares down about 4% on Thursday.

"In the fourth quarter, we'll see a more pronounced year-over-year (sales) decline driven by the timing of releases for 'Magic: The Gathering'," CFO Gina Goetter said on a post-earnings call.

The Play-Doh parent is prioritizing "profitable revenue" through a turnaround strategy involving a tighter supply chain and lower inventory, the divestiture of its live-action assets and a sharpened focus on its higher-margin digital gaming business.

The company posted an adjusted margin of 25.7% for the quarter, up from last year's 22.8%. Its inventory fell 39%.

"While the toy industry is on a rocky road, the cost-control measures that Hasbro and Mattel have put in place should put them on sounder footing in the year ahead," said eMarketer analyst Zak Stambor.

Rival Mattel also beat quarterly profit expectations, but lowered its annual sales forecast heading into the crucial holiday shopping season.

Growth in Hasbro's key brands such as Nerf have lagged this year, with analysts noting uncertainty around its gaming pipeline and its ability to sustain last year's success of digital games "Baldur's Gate III" and "Monopoly Go!".

It expects full-year revenue from the Wizards of the Coast and Digital Gaming segment to come in flat to down 1%, compared with earlier expectations of a fall between 1% and 3%.

Hasbro forecast annual revenue from its consumer products segment to fall between 12% and 14%. Its prior estimate was for a 7% to 11% decline.

Quarterly revenue came in at $1.28 billion, compared with estimates for a 13.8% drop to $1.30 billion, according to data compiled by LSEG.

On an adjusted basis, it reported earnings per share of $1.73, beating estimates of $1.28.

(Reporting by Savyata Mishra in Bengaluru; Editing by Devika Syamnath)