Transformers boosts Hasbro's Q3 profits

Net sales decrease slightly, but profits are up 11 per cent, due mainly to Transformers and GI Joe.
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Hasbro has reported net sales for the period ended September 27th were $1.28 billion compared to $1.30 billion in 2008, a decrease of two per cent, or an increase of one per cent without the impact of foreign exchange.

Net profit was $150.4 million versus $138.2 million or 99 cents per share compared to 89 cents per share, an increase of 11 per cent in EPS year-on-year.

The 2009 third quarter results include a three cents per share dilutive impact from the company’s investment in its joint venture with Discovery Communications and initial investments in Hasbro’s virtual studio.

Brian Goldner, president and CEO said: “Hasbro performed well in what is continuing to be a challenging global environment. We grew revenues absent the impact of foreign exchange and we grew earnings and earnings per share including the dilution from the investments we are making in our joint venture with Discovery Communications and Hasbro’s virtual studio.

“We believe we can grow revenues in 2009 if our consumer retail takeaway continues to improve in line with recent fourth quarter trends. We also continue to believe that the underlying strength of our brands and our commitment to our strategy will enable us to grow earnings per share in 2009, including the expected dilution from our television investment,” Goldner concluded."

Entertainment and licensing segment net revenues leapt to $41.6 million from $18.3 million in 2008. The results primarily reflect increases in Transformers and GI Joe. The entertainment and licensing segment reported an operating profit of $19.8 million compared to $6.3 million in 2008.

US and Canada segment net sales were $791.9 million, compared to $821.0 million in 2008.and reflect a strong performance in the boys category, offset by declines in girls, pre-school and the games and puzzles category. Profit for the segment dropped to $129.1 million, from $131.9 million in 2008.

International segment net revenues were $444.1 million, compared to $460.6 million in 2008. Revenues grew four per cent, without the negative foreign exchange impact of $34.3 million.

The results reflect growth in boys and pre-school categories offset by declines in the girls and the games and puzzles category. The International segment reported an operating profit of $64.1 million compared to $65.8 million in 2008.

Deborah Thomas, chief financial officer commented: "As we look to the remainder of the year, we are well positioned with a broad-based portfolio that is both innovative and priced right for today’s value oriented consumer.

"We will also continue to focus on managing our business efficiently while investing for the long term."


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