HASBRO: Price hike as Q2 results posted

Hasbro reports second quarter results and unveils plans for price rises.
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Hasbro has posted higher than expected quarterly profit today, aided by sales of toys tied to movies including Indiana Jones and brands such as G.I. Joe. The toymaker also unveiled plans to hike prices to combat rising costs.

Hasbro shares fell four per cent, hurt in part by the company's comments on costs, said Chris White, a Wedbush Morgan Securities analyst: "Clearly, they are starting to feel (the effect of rising costs), and the question now is, how big is it?"

Second quarter profit rose to $37.5 million, or 25 cents a share, from $4.8 million, or 3 cents a share, a year earlier.

Analysts, on average, had expected a profit of 22 cents per share, according to Reuters Estimates. Hasbro also said sales rose 13 per cent to $784.3 million.

Hasbro said U.S. and Canadian sales rose 11 per cent to $467.7 million, while sales in international markets increased 15 per cent to $293.7 million, aided by the weak dollar.

This year companies are being hit by high commodity prices. Hasbro has cited higher costs for transporting its goods, despite expecting higher earnings this year.

"While input cost inflation continues to be challenging, thus far we have been able to mitigate most of the impact through cost savings initiatives and pricing actions," Hasbro Chief Operating Officer and Chief Financial Officer David Hargreaves said in a statement.

From 1st September, Hasbro will raise prices for its toys in the mid-single-digit percentage range to protect its margins, Hargreaves added on a conference call. Mattel also raised prices on most of its products by mid-to-high-single-digit rates in June.

Stern Agee analyst Margaret Whitfield predicted that sales of toys should remain steady during unsteady economic period. "Toys are priced typically under $20. A price increase to keep pace with input costs is not as significant as it would be in the case of a higher-priced consumer product,' Whitfield said.

Hasbro said it spent $51.6 million to buy back 1.65 million shares of its common stock during the second quarter.

Hasbro shares were down $1.50 to $36.49 in morning trade on the New York Stock Exchange after falling as low as $35.86 earlier in the session. The shares have traded as low as $21.70 and as high as $39.97 in the past year.

Source: Reuters

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