US: Hasbro cuts back after lower Christmas sales

It expects 2012 revenues to reach around $4.09 billion, compared to $4.29 billion in 2011.
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Hasbro plans to cut back in order to save $100 million per year by 2015.

The toy giant made the announcement as part of its preliminary full-year financial results for 2012, following weaker than anticipated consumer demand for toys during the Christmas period.

A statement read: "The company expects to incur charges of approximately $37 million pre-tax in 2012, and an additional estimated $20-$30 million in 2013 associated with these planned actions to reduce ongoing expenses, including an approximate 10 per cent reduction in workforce, facility consolidation and process improvements. 

"These actions are anticipated to begin to deliver savings in 2013, with full recognition in 2015 as all aspects of the plan are implemented."

Hasbro also expects to report full-year 2012 revenues of approximately $4.09 billion, compared to $4.29 billion in 2011. 

For Q4 2012, it estimates revenues to total $1.28 billion, including a negative $8 million impact from foreign exchange, down from $1.33 billion in 2011.

However, there were plenty of positives, too.

"In 2012, we met many of the objectives we set for Hasbro," said Brian Goldner, Hasbro's President and Chief Executive Officer. 

"Based on preliminary results, we returned the US and Canada segment to historical operating profit levels; we grew revenues in the Games category against our 2012 objective of stabilizing revenues; and we grew revenues in our Girls category. 

"We also experienced double digit growth in our emerging markets business and achieved profitability in most major emerging markets a year ahead of our plan.

"Consumer demand through much of the holiday season was less than anticipated in both the US and certain international markets. As a result, fourth quarter revenues did not meet our expectations."

Hasbro CFO Deb Thomas added: "We fundamentally believe our strategy is sound and we remain confident in our ability to drive profitable long-term growth through brand innovation.

"We believe a reduction in ongoing costs in a challenging environment will deliver the greatest long-term return to our shareholders."

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