While overall revenues were down at Hasbro in Q4 and fiscal 2018, largely due to the Toys”R”Us bankruptcy, the company posted gains in its entertainment and licensing segment.
Revenues for 2018 fell by 12 percent to $4.58 billion, while Q4 revenues were down 13 percent to $1.39 billion. Key factors included the Toys”R”Us liquidation as well as, in Europe, “changing consumer shopping behaviors, a rapidly evolving retail landscape and reduced retail inventory, amidst challenging economies in key markets,” the company said.
Net profit for the year fell to $220.4 million. In Q4, net profit was $8.8 million, as compared with the year-ago net loss of $5.3 million.
Entertainment and licensing revenues gained 5 percent to $298.5 million in the year, due to changes in revenue recognition in 2018 and a multi-year digital streaming deal for Hasbro programming.
“2018 was a very disruptive year, driven by the bankruptcy and liquidation of Toys“R”Us across most of the world and a rapidly shifting consumer and retail landscape,” said Brian Goldner, Hasbro’s chairman and chief executive officer. “During 2018, we diversified our retailer base, meaningfully lowered retailer inventories and delivered innovative new offerings to our global consumers. We were not, however, able to recapture as much of the Toys“R”Us business during the holiday period as we anticipated as the effect of its liquidated inventory in the market was more impactful than we and industry experts expected. It is an unprecedented yet finite event. In addition, as we discussed throughout the year, our European shipments declined as the teams successfully lowered retailer inventories amidst a declining toy and game market.”
Goldner continued: “Throughout 2018, we engaged in several major innovation initiatives and initiated significant organizational changes to enable us to stabilize our European business in 2019 and return Hasbro to profitable growth this year. In 2019 we are entering the next innovation cycle for NERF and we will deliver break frame innovation across price points in the market this year. Hasbro’s Power Rangers line will hit the market in the second quarter, setting the stage for an all-new era for this iconic brand. We are positioned to advance our gaming leadership, leveraging our investments, social relevance, innovative gameplay and the industry’s broadest games portfolio, including the launch of our digital game Magic: The Gathering Arena. We will deliver all-new play experiences in support of a raft of compelling entertainment properties, including Marvel Studios’ Captain Marvel and Avengers: Endgame, Columbia Pictures’ Spider-Man: Far From Home, Disney Animation’s Frozen 2 and Lucasfilm’s Star Wars: Episode IX. Finally, to successfully deliver these and numerous other initiatives, we’ve re-imagined and re-designed our go-to-market strategy globally supported by compelling, digital-first marketing programs for our consumers and retailers.”