PAWTUCKET – Hasbro Inc. reported a 136% boost in profit in 2019, to $520.5 million, or $4.05 per diluted share, according to a company filing on Tuesday.
The company earned $220.4 million in 2018, or $1.74 per diluted share.
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The company’s 2019 results were boosted by strong Frozen 2 sales, as well as Marvel: Avengers, Spider-Man and Star Wars sales.
“The global Hasbro team delivered a good year and achieved key objectives we set for 2019. We profitably grew revenue across regions absent foreign exchange, supported by the successful execution of our channel strategy; we delivered growth in Magic: The Gathering driven by the successful launch of Arena and we executed at a high level during the holiday season,” Brian D. Goldner, Hasbro’s chairman and CEO, said on Tuesday.
The year also marked the execution of Hasbro’s completed acquisition of Entertainment One Ltd. for roughly $4 billion, although the company completed the deal on Dec. 30, the first day of the company’s fiscal 2020 first quarter.
“Our acquisition of Entertainment One accelerates our Brand Blueprint strategy and significantly expands our expertise and capabilities as a global play and entertainment company,” Goldner added. “Our teams are actively engaged to unlock value across our organization – in gaming, in toys, in consumer products and in entertainment.”
Revenue for the year was $4.7 billion, a 3.1% increase year over year. The following is a breakdown of segment revenue for the year:
- The company’s franchise brands segment reported $2.4 billion in revenue for the quarter, a 1% decline from 2018. The company said that Baby Alive, My Little Pony, Nerf and Transformer sales declined, while Magic: The Gathering and Monopoly sales increased.
- Hasbro’s partner brands segment reported 24% revenue increase from 2018 to 2019 to $1.2 billion. The increase was credited to sales of Frozen 2 merchandise, a boost in sales in Marvel: Avengers and Spider-Man toys and a strong sales figure for Star Wars toys in the fourth quarter.
- The Hasbro gaming segment reported $709.8 million in revenue, a 10% decline year over year. The company cited a decline in game sales for products such as Pie Face and Speak Out, offset by an increase in sales of Dungeons & Dragons.
- Emerging brands reported a 5% increase in revenue to $377.6 million. The increase was attributed to shipments of Power Rangers, Playskool and Mr. Potato Head, offset by a decline in Littlest Pet Shop and Quick Strike collectable offerings.
The company noted that it had paid $226.6 million in dividends for the year.
The company also did not log severance payments for 2019 in its year-end filing, after reporting $77.9 million in severance costs for 2018. It also did not log cost impacts of the closure of Toys R Us for 2019, after reporting a $52.8 million impact one year prior.
Hasbro did however, recognize a $110.8 million charge in the second quarter related to the settlement of its U.S. defined pension benefit pension plan, in addition to another $200,000 payment in the fourth quarter.
The company also said that it incurred $17.8 million in eOne acquisition costs for the year.
“Our teams worked extremely hard and executed at a high level this holiday, driving fourth quarter and full-year revenue and profit growth while also diversifying our supply chain and preparing to close a major acquisition,” said Deborah Thomas, Hasbro’s chief financial officer.
The company had been impacted by tariffs in the third quarter, with some retailers canceling shipments. The company has previously said that it working to reduce its reliance on manufacturing in China through supply chain diversification.
Profit for the fourth quarter was $267.3 million, an increase from $8.8 million one year prior. Quarterly revenue was $1.4 billion, a 2.8% increase year over year.
On an earnings call with analysts Tuesday, Thomas said the coronavirus has disrupted Hasbro’s supply chain and commercial operations in China. She said the impact on its business to date is small, though it’s difficult now to quantify the potential magnitude.
Chris Bergenheim is the PBN web editor. You may reach him at Bergenheim@PBN.com. Bloomberg News contributed to this article.
