Toys“R”Us Liquidation Continues to Impact Hasbro Financials

Hasbro saw its net revenues for the second quarter of 2018 decrease 7 percent to $904.5 million, impacted by the liquidation of Toys“R”Us in the U.S. and other global markets.

“2018 is unfolding as expected as our teams manage the liquidation of Toys“R”Us in many markets and address the rapidly evolving European retail landscape,” said Brian Goldner, Hasbro’s chairman and CEO. “We are investing in our business—in innovation, entertainment and a modern global commercial organization, to drive profitable growth in 2019 and beyond. Consumer takeaway is up for our brands, and we further strengthened our brand portfolio through the acquisition of Power Rangers. We are focused on moving beyond the near-term disruption of losing a major customer, with a clear path forward including new retailer activations to meet the consumer demand made available by the Toys“R”Us departure.”

“Our global teams executed well despite the disruption in the market,” said Deborah Thomas, Hasbro’s chief financial officer. “With $1.2 billion in cash, and a healthy balance sheet, our financial position is strong. Our diverse portfolio enabled us to partially offset the negative margin impact from lower revenues, but not entirely. We are working with our retailers to successfully execute their plans for Hasbro’s innovative portfolio this holiday season.”

Net earnings for Q2 were $60.3 million, compared to $67.7 million in the same quarter last year.

Q2 U.S. and Canada segment net revenues decreased 7 percent to $459.3 million. The segment reported an operating profit of $76.2 million, compared to an operating profit of $81.6 million in 2017. The segment’s quarterly performance was impacted by the loss of Toys“R”Us revenues and the near-term disruption of its stores’ liquidation. International segment net revenues were $380.4 million, down 11 percent. Revenues in the segment were impacted by efforts to clear excess retail inventory in Europe, as well as the loss of Toys“R”Us revenues in many European and Asia-Pacific markets.

In the entertainment and licensing segment, net revenues increased 26 percent to $64.7 million. Operating profit increased 64 percent to $18.6 million.