Hasbro revenues remain steady while profits tumble

Profits for Q1 fall 71 per cent, but firm says ?stage has been set for a strong year.?
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Net sales for the first quarter 2011 were $672 million, compared to $672.4 million year-on-year. The firm said foreign exchange had a positive $4.8 million impact on revenues in the period.

Net earnings for Q1 were $17.2 million, compared to $58.9 million in Q1 2010.

Brian Goldner, president and CEO, commented: “2011 is the first year in our multi-year strategic plan in which we will have significant initiatives across all elements of our brand blueprint – in television, in movies, in digital gaming, in licensing and, most importantly, across our broad portfolio of toys and games.

“We began the year by delivering a quarter consistent with our plan, including growth in many brands and across many countries. Importantly, we are building momentum leading up to the theatrical release of Transformers: Dark of the Moon on July 1st and two new Marvel films, Thor and Captain America: the First Avenger, this summer; multiple new innovative product launches; and the airing of Hasbro Studios television programs in territories around the world.

“The stage has been set for a strong year, and we continue to believe that we will grow revenues and earnings per share for the full-year 2011.”

During the first quarter, one of the highlights was that worldwide net revenues in the boys product category increased 25 per cent to $290.2 million.

Meanwhile, the games and puzzles category decreased 12 per cent to $200.4 million. The girls category also declined 13 per cent to $113.2 million and the pre-school category was down 18 per cent to $68.2 million.

US and Canada segment net revenues decreased eight per cent to $391.2 million, compared to $424.7 million in 2010. The results reflect growth in the boys category offset by declines in the other major categories.

The US and Canada segment reported an operating profit of $41 million, compared to $61.1 million in 2010.

International segment net revenues were $254.3 million, an increase of 15 per cent, compared to $221.7 million in 2010. Net sales in the international segment grew 13 per cent absent the positive $3.1 million impact of foreign exchange.

Increased sales in the international segment reflects growth in the boys category slightly offset by declines in the other major product categories. The International segment reported an operating loss of $1.7 million, compared to an operating loss of $2.4 million in 2010. 

Entertainment and Licensing segment sales declined two per cent to $24.6 million, compared to $25.1 million in 2010. This reflects lower licensing revenue primarily associated with the 2009 movie, Transformers: Revenge of the Fallen, mostly offset by increases in other brands’ licensing revenue as well as movie and TV related revenues.

The entertainment and licensing segment reported an operating profit of $5.4 million compared to $9.4 million in 2010.

“Hasbro’s financial position remains strong,” said Deborah Thomas, CFO. “Our first quarter results reflect continued strategic investments to fuel the future growth of Hasbro.

“In the first quarter, this spending includes higher product development to support the increased number of initiatives Hasbro has planned this year and over the next several years, continued investments in emerging markets and our now fully-staffed team running our television initiatives.”


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