Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from Margaret Whitfield.
Margaret B. Whitfield - Sterne, Agee & Leach
Good morning. In your comments, I think David you were referring a lot to the full year numbers. Could you give me some color on why the operating profit in North America was down 22% but it was up 40% overseas?
David Hargreaves
Yeah, I think in the U.S. in particular, A, we were trying to anniversary a very strong fourth quarter last year. I think what happened last year is that we ended up exceptionally clean in terms of obsolescence, in terms of markdowns and the fourth quarter of last year, we actually reversed some reserves.
That said, this year also included a number of items of investment spending. We are spending against a start-up in Brazil, a start-up of our own company. We have certainly been kept the advertising going later throughout the full quarter in order to make sure we drove a very clean retail position and we’ve also been investment spending in Wizards of the Coast online initiative.
So I think those were factors that meant that operating profit in North America were lower in the fourth quarter.
Margaret B. Whitfield - Sterne, Agee & Leach
I also wondered if you could give us the increase in the boys segment. I think you gave every other segment on the prepared remarks.
David Hargreaves
I think it was 78% for the full year.
Margaret B. Whitfield - Sterne, Agee & Leach
And the first half of last year was so strong -- any deliveries other than the movie-related lines that would support your business in Q1 and 2 in terms of new products or existing products, such as Transformers continuing?
David Hargreaves
As we go into ’08, I think clearly we have very strong momentum across a lot of our product line. I think retailer inventories are in pretty good shape and we are looking forward to a good first quarter.
Alfred J. Verrecchia
I think, not to refute what David said, but Transformers continues to be very strong at retail. Star Wars continues to do well -- Littlest Pet Shop, My Little Pony, so the brands that carried us through 2007, many of the continue to do very well in the early part of 2008.
David Hargreaves
And of course, Littlest Pet Shop VIPs, which were test-marketed at the end of last year, will be rolling out both nationally and starting to roll out internationally during the first quarter.
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