Hasbro reports lower than expected results

Hasbro has reported a fall in profits for both the fourth quarter and the full-year.
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The firm has reported net sales of $4 billion for 2008, a rise of five per cent year-on-year. Profit was down to $306.8 million or $2 per share, compared to $333 million or $1.97 per share in 2007.

The fourth quarter saw net sales down to $1.2 billion - a decrease of $66.8 million or five per cent compared to a year ago. Revenues increased one per cent excluding the negative $80.1 million impact of foreign exchange.

Net profit for Q4 was also down to $93.6 million or 62 cents per share, compared to $133.7 million or 84 cents per share in 2007

The firm has reported that boys, girls, pre-school and tweens up globally compared to a year ago, with growth driven by strong performances from Star Wars, Play Skool, Nerf, Littlest Pet Shop and Easy Bake, as well as both board and trading card games.

Brian Goldner, president and chief executive officer said: “In a challenging environment, we delivered both revenue and earnings per share growth in 2008, while also continuing to make investments in our future.

“As we look to the year ahead, given the severity of the downturn in global economies, we are focused on keeping costs down, managing our operating cash flow and continuing to invest in our business for the long term.

“That said, we believe the underlying strength of our brands and commitment to our strategy should enable Hasbro to grow revenue and earnings per share in 2009, absent a material deterioration in economic conditions or the value of foreign currencies.”

U.S. and Canada segment net sales for the full year were $2.4 billion, an increase of $113.0 million or five per cent compared to $2.3 billion in 2007. The segment reported a slight drop operating profit of $283.2 million, compared to $287.8 million in 2007.

The International segment net sales were $1.5 billion, an increase of $54.5 million or four per cent compared to $1.4 billion in 2007. The revenues include a negative foreign exchange impact of approximately $7.4 million.

Inclusive of the investment spending in the emerging markets, the International segment reported a drop in operating profit to $165.2 million from $189.8 million in 2007.

David Hargreaves, COO and chief financial officer commented:

“After a very strong performance in the first nine months of the year, the fourth quarter clearly had significant headwinds – the negative impact of foreign exchange and the broad based global economic downturn.

“To keep our core brands strong and to drive consumer traffic in the critical selling weeks prior to the holidays, we worked with our global retail partners and put additional promotional programs in place. This resulted in our finishing 2008 in a much better inventory position than we would have otherwise, although it did negatively impact operating profit in the fourth quarter.”

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