Hasbro Posts 83 Percent Increase in Q1 Earnings


PAWTUCKET: Hasbro reported that its net earnings for the first quarter of 2016 increased 83 percent to $48.8 million, with strong demand for Disney Princess dolls and toys based on the Hollywood blockbuster Star Wars: The Force Awakens.

“The momentum with which we ended last year has continued throughout the first quarter 2016, delivering revenue and earnings growth,” said Brian Goldner, Hasbro’s chairman, president and CEO. “Our focus on executing our ‘Brand Blueprint’ continues to drive strong retail and consumer demand for our brands, while enhancing overall profitability of Hasbro. Hasbro franchise brand revenue increased behind continued double-digit growth in NERF and Play-Doh, overcoming expected difficult quarterly comparisons in Transformers as well as a digital streaming deal in the entertainment and licensing segment recorded last first quarter. Demand for Star Wars: The Force Awakens products continued to be high and we benefited from the addition of Disney Princess and Frozen fashion and small dolls. We are very encouraged with global demand and our outlook for 2016.”

Net revenues for Q1 increased 16 percent to $831.2 million versus $713.5 million in 2015. Excluding a negative $28.6 million impact from foreign exchange, first-quarter revenues increased 20 percent.

Q1 U.S. and Canada segment net revenues increased 28 percent to $443.6 million. Growth in the boys, girls and preschool categories more than offset a decline in the games category. The U.S. and Canada segment reported operating profit growth of 89 percent to $78.3 million.

International segment net revenues increased 13 percent to $345 million. All four product categories—boys, games, girls and preschool—posted revenue growth. Regionally, Europe gained 14 percent, Latin America declined 3 percent and the Asia Pacific was up 25 percent. Emerging markets revenues declined 7 percent. Excluding an unfavorable $26.7 million impact of foreign exchange, net revenues in the international segment grew 22 percent. As reported, international segment operating profit of $2.9 million was up 50 percent.

Entertainment and licensing segment net revenues were down 30 percent compared to 2015 to $42.5 million. This is largely because Q1 2015 benefited from a multiyear digital streaming deal for Hasbro Studios television programming, which was not repeated in 2016. Segment operating profit declined 67 percent to $5.4 million.

Across the product categories, boys delivered revenue increases of 24 percent to $336.9 million; games’ revenues were down 2 percent to $336.9 million; girls was up 41 percent to $165.4 million; and revenues from the preschool category were up 11 percent to $97.8 million.

“The first quarter was a very good quarter for Hasbro,” said Deborah Thomas, Hasbro’s chief financial officer. “The strength of our results reflected the continued momentum in our business and strong execution from our global teams. We grew revenues, operating profit and earnings despite the continued negative impact from foreign exchange and challenging economic environments in some international markets. We returned $93.2 million in cash to shareholders and ended the quarter with a very strong balance sheet positioned to support our 2016 growth outlook. While most of the year remains ahead of us, it was a good start to the year.”