Hasbro grew its pre-school and licensed categories during the three months ending July 1st, offsetting a decline in boys, girls and games products.
Net revenues fell 10.6 per cent from $908.5 million to $811.5 million year-on-year during its financial Q2, while net earnings dropped 5.6 per cent, from $46 million to $43.4 million. The latter excludes a tax adjustment and costs associated with setting up its Gaming Center of Excellence in Rhode Island.
Entertainment and licensing sales rose 59 per cent from $27.2 million to $43.2 million, due to ‘the sale of TV content’.
Sales of boys toys fell 16 per cent, despite strong sales of Marvel products, which offset declines in Transformers and Beyblade products. The Games category dropped eight per cent in terms of net revenues, but Magic: The Gathering, Duel Masters and Battleship all grew.
Girls toys sales dipped 13 per cent overall, although Hasbro says My Little Pony continued to grow after being backed by TV programming.
Pre-school sales increased six per cent, backed by strong performances in the Playskool Heroes line, Transformers Rescue Bots and more.
Operating profit rose from 10.3 per cent of revenues to 10.6 per cent of revenues.
International sales, which includes the UK and Europe, dipped four per cent year-on-year, while operating profit fell 12 per cent from $33.8 million to $29.9 million. Hasbro said growth in Latin America was offset by a decline in Europe and Asia Pacific.
US sales fell 19 per cent but profit rose six per cent to $60.9 million during the quarter.
“2012 continues to develop in line with our expectations as we shift more of our shipments later in the year while improving profitability in the near term,” said Hasbro president and CEO Brian Goldner.
“In the US and Canada we have gained share. Internationally, we continue our global expansion, leveraging investments in emerging markets, product innovation and entertainment to drive Hasbro brands globally. Finally, our TV strategy is delivering growth within our entertainment and licensing segment and creating demand for our toys and games in global markets."
“As we enter the second half of the year, we have innovative brand initiatives across product categories and geographies. For the full year 2012, we continue to believe, absent the impact of foreign exchange, we will again grow revenues and earnings per share.”
CFO Deborah Thomas added: “As we enter the second half of 2012, Hasbro is in a strong financial position with healthy cash flow and great initiatives for the holidays. A year ago, we made an investment in Games, establishing Hasbro's Gaming Center of Excellence. One year later we believe we are well positioned with innovative gaming products and strong marketing programs for the holiday season.”
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