Hasbro reported a smaller than expected drop in first-quarter sales and beat profit estimates. Reporting on Wednesday 24 April, Hasbro noted that the figures were helped by leaner inventories and steady digital gaming revenue.
Revenue declined 24% to USD 757.3 million (GBP 608 million). This was driven primarily by the eOne film and television sale to Lionsgate last August. Excluding the sale the revenue decline was 9%. There was healthy growth for the Wizards of the Coast and Digital Gaming segment (+7%) and Entertainment (+65%) but these were more than offset by falls in Consumer Products (-21%). Operating profit was USD 116.2 million (GBP 93 million).
“The first quarter was a good start to the year for Hasbro; we are continuing to see the results of our transformation work”
Chris Cocks, Hasbro CEO
“The first quarter was a good start to the year for Hasbro; we are continuing to see the results of our transformation work,” said Chris Cocks, Hasbro CEO. “Performance from our licensing portfolio shows the strength of our brands and we continue to fuel innovation in games and toys as we expand our reach across play patterns to fans of all ages.”
Hasbro is making fundamental changes to its business model and shifting to an out-license model. This allows it to outsource toy production for lower-margin brands to other toy manufacturers.
“We made solid progress in our turnaround efforts in the first quarter,” said Gina Goetter, Hasbro’s chief financial officer. “We landed revenue where we expected and drove significant operating profit improvement led by our operational excellence programme and improved business mix. We remain on track for our full-year commitments.”
It is worth noting that rival Mattel reported a narrower loss than analysts expected the day before, Tuesday. This was thanks to growing sales of its Hot Wheels cars and cost cuts and stores clearing out toy inventories.
