Hasbro Q3 profit rises ten per cent

Firm sees increases in both profit and sales during the third quarter.
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Hasbro has reported five per cent net revenues growth to $1.38 billion, compared to $1.31 billion in the third quarter 2010.

The company also saw a ten per cent increase in net profit for the period, to $171 million compared to $155.2 million or $1.09 per diluted share in 2010.

Worldwide net sales in the boys product category soared by 15 per cent to $534.6 million; the games and puzzles category decreased by six per cent to $364.7 million; the girls category also declined four per cent to $259.1 million while the pre-school sector was up 12 per cent to $217.4 million.

US and Canada net sales declined by seven per cent to $764.6 million compared to $825.5 million in 2010. However, the firm's products experienced an eight per cent increase year-over-year in point-of-sale at its top four US accounts.

Hasbro says that the US and Canada results reflect growth in the pre-school category, which was offset by declines in the boys, girls and games and puzzles sectors. The US and Canada segment reported a decreased operating profit of $128.8 million, compared to $158.8 million in 2010.

International segment net sales shot up by 23 per cent to $563.3 million, an increase of $104.4 million, compared to $458.9 million in 2010. Sales grew 15 per cent without the positive $35.2 million impact of foreign exchange.

Increases in the international segment, Hasbro said, reflects growth in the boys category, which offset slight declines in the other product categories. The international segment reported a 42 per cent increase in operating profit to $100.7 million, compared to an operating profit of $70.8 million in 2010.

Entertainment and licensing segment net revenues increased by a whopping 69 per cent to $46.3 million, compared to $27.5 million in 2010. This result reflected growth in licensing revenue associated with the sale of television programming globally, movie and merchandise-related revenue from Transformers: Dark of the Moon, as well as a onetime payment from Universal Studios. The segment reported an operating profit of $15.3 million compared to $5.9 million in 2010.

“We continue to expect to deliver meaningful growth in both revenues and earnings per share for the full-year 2011 versus our 2010 reported full-year results,” said Brian Goldner, president and CEO.

“Our performance this year demonstrates we are successfully executing our strategy globally. We begin the fourth quarter with a number of encouraging factors supporting our full-year outlook.

"We have a great line up of innovative, sought-after toys and games for the holiday, many of which are only recently hitting retail shelves; our point-of-sale both in the U.S. and internationally is positive and showing good momentum; our U.S. retail inventories are down versus a year ago; and we continue to experience very strong trends in our international business.”

Deborah Thomas, chief financial officer, added: "Our third quarter results highlight the continued strength of our international business as well as the leverage we are achieving from our investments.

"This resulted in a higher mix of revenue and profits from the International segment in the third quarter. Given our liquidity and confidence in our long-term strategy, we continued to be active buyers of Hasbro shares during the quarter, purchasing 5.6 million shares at an average price of $37.74."

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