Hasbro reports Q1 profit drop

The firm yesterday reported a profit drop of 47 per cent for the first quarter.
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Profit for the first quarter of 2009 was $19.7 million, or 14 cents per share, compared to $37.5 million or 25 cents per share in 2008.

The company reported sales for the period fell almost 12 per cent to $621.3 million, compared to $704.2 million a year ago.

Brian Goldner, president and chief executive officer commented: “As we communicated earlier this year, we expected revenues to decline in the first quarter due to economic challenges, the impact of foreign exchange and retailers reducing inventory levels.

“To drive momentum in our business in the coming quarters, we have new product initiatives across each of our major product categories including pre-school, games, girls and boys, including the highly anticipated theatrical releases of Transformers: Revenge of The Fallen, G.I. Joe: Rise of Cobra and Marvel’s X-Men Origins: Wolverine.”

US and Canada segment net sales were $404.5 million, compared to $428.5 million in 2008. The results reflect growth in Star Wars, Playskool, Nerf and board games, offset by declines in Littlest Pet Shop, Transformers and Marvel brands.

International net sales were $189.2 million, compared to $248.3 million in 2008. The revenues include a negative foreign exchange impact of approximately $36.1 million.

International results reflect declines in Transformers, My Little Pony, Action Man, In The Night Garden and board games, partially offset by growth in Star Wars and Nerf.

David Hargreaves, chief operating officer and chief financial officer said: “Given the revenue headwinds during the first quarter, including foreign exchange, retailer inventory rebalancing and the later Easter, we took a number of measures that were successful in mitigating the impact of the revenue reduction on profitability.

“Based on the strength of our product line, we believe the two most recent quarters will prove to have been the most challenging for Hasbro in this economic cycle. Our balance sheet is strong and we remain focused on investing in our global business for the long term.”

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