BENGALURU: US Toy maker Hasbro Inc., (Hasbro) reported almost flat net revenue (up by 0.1 percent) in the quarter ended September 27, 2015 (Q3-2015, current quarter) at $1471 million as compared to the $ 1469.90 million in the quarter ended September 28, 2014 (Q3-2014, year ago quarter). Net sales were propped up by a 5.2 percent increase in US & Canada sales of $803.80 million in the current quarter as compared to the $764.30 million during the corresponding year ago quarter. Gains by the US and Canada net sales were set off by a 5.7 percent decline in International sales lead by a massive 13 percent decline in Latin America sales. International sales declined in the current quarter to $612.60 as compared to the $649.30 in Q2-2014.
The company’s net earnings attributable to Hasbro shareholder in the current quarter improved to $207.6 million (14.0 percent of net sales) as compared to the $ 180.46 million (12.3 percent of net sales) in Q2-2014.
‘Boys’ brands net sales also grew by 23.9 percent to $593.10 million in Q3-2015 as compared to the $478.50 million in the corresponding year ago quarter. The growth in Boys brand of $114.60 million was offset by an almost equal decline (decline of $112.90 million) in ‘Girls’ brands which declined 27.7 percent to $294.80 million in the current quarter as compared to the $407.70 million in Q3-2014.
“Strong global consumer demand across Hasbro Franchise Brands and Partner Brands drove continued momentum in our business,” said Hasbro’s Chairman, President and Chief Executive Officer Brian Goldner. “Brand innovation and superior market execution delivered not only underlying revenue growth, but higher profitability in a very challenging foreign exchange environment. We have innovative play experiences and marketing initiatives across brands, demographics and geographies this holiday season and remain focused on executing and investing for continued growth in future years.”
“Throughout 2015, our teams have positioned Hasbro to succeed in a very challenging environment,” said Hasbro’s Chief Financial Officer Deborah Thomas. “Tremendous innovation across brands and a strong entertainment slate has driven favourable product mix and underlying profit gains. Through the third quarter, pricing and hedging programs have protected our margins, but only through the strong execution of the team will we continue to deliver against our objective to expand operating profit margin over time. We also continue to invest in future innovation and systems, which positions us for long-term growth and shareholder value creation.”
Brands
‘Boys’ brands
The company says that the retail launch of ‘Star Wars: The Force Awakens’ product along with growth in franchise brand ‘Nerf’ and the positive contribution from ‘Jurassic World’ products drove the strong YoY growth. These gains more than offset the decline in ‘Transformers’, which faced difficult comparisons versus 2014 shipments in support of the theatrical release of ‘Transformers: Age of Extinction’.
Games
Games category revenues declined 8 percent in the current quarter to $363.5 million as compared to the $395.20 million in Q3-2015. Growth in franchise brand ‘Monopoly’ and initial shipments of ‘Playmation Marvel’s Avengers’ were more than offset by declines in franchise ‘Brand Magic: The Gathering’ and several other games says Hasbro.
‘Girls’ brands
‘Girls’ brands net sales declined on account of ‘Furby’, which continued to drive decline along with relatively smaller declines in franchise brand ‘My Little Pony’, and a decline in ‘Furreal Friends’. Growth in ‘Play-Doh Dohvinci’ and shipments of Disney’s Descendants partially offset the revenue declines in other girls’ brand says the company.
Pre-school category
Preschool category revenues increased 16.5 percent in Q3-2015 to $219.6 million as compared to the $188.50 million in the corresponding year ago quarter. Growth in franchise brand Playdoh, along with shipments of Playskool Heroes Star Wars Galactic Heroes and Jurassic World as well as the launch of Playskool ‘Friends My Little Pony’ more than offset revenue declines in core Playskool products says Hasbro.
Entertainment and Licensing segment
External net revenues for the Entertainment and Licensing segment declined 2.4 percent to $52.14 million as compared to the $53.4 million in the corresponding year ago quarter. The decline in revenue was primarily driven by a difficult comparison with ‘Transformers: Age of Extinction’ entertainment and licensing revenue last year., explains Hasbro.
The Entertainment and Licensing segment reported an increase in operating profit to $16.2 million compared to $0.5 million in 2014. In 2014, operating profit was negatively impacted by the acceleration of certain programming amortization costs says the company.
Dividends
Hasbro paid $57.5 million in cash dividends to shareholders during the third quarter 2015. The next quarterly cash dividend payment of $0.46 per common share is scheduled for November 16, 2015 to shareholders of record at the close of business on November 2, 2015.
