PAWTUCKET – Hasbro Inc. reported a profit of $26.7 million in the first quarter of 2019, a reversal from a $112.5 million loss in the first quarter of 2018, according to a filing with the U.S. Securities and Exchange Commission Tuesday. Earnings per diluted share for the quarter were 21 cents, compared with a loss of 90 cents per diluted share one year prior.
Revenue for the period increased 2.3% to $737.5 million over the year. The sales growth comes following the shuttering of Toys R Us stores in late 2017, which significantly impacted Hasbro’s sales and earnings.
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“The global Hasbro team is executing very well and delivered a good start to the year,” said Brian Goldner, Hasbro’s chairman and CEO in prepared remarks. “Our long-term investments in new platforms provided a meaningful contribution from our digital and e-sports initiative, Magic: The Gathering Arena, as well as growth in MAGIC: THE GATHERING tabletop revenues. In addition, MONOPOLY, PLAY-DOH and TRANSFORMERS were among the brands posting revenue gains this quarter. … Operating profit was driven by high-margin revenue growth and our cost savings activities. With most of the year ahead of us, we remain on track to deliver profitable growth for the full-year 2019.”
Hasbro said in its filing that it experienced $17.3 million in pre-tax charges related to severance costs, largely outside of the United States, in the first quarter of 2018, related to a “new go-to-market strategy designed to be more omni-channel and e-commerce focused.” It also estimated that the Toys R Us closure had impacted the company by $70.4 million in pre-tax incremental costs to start 2018.
The company paid $79.3 million in dividends in the quarter along with $49.2 million in share repurchases. Hasbro is scheduled to pay a dividend of 68 cents per common share on May 15 for shareholders of record on May 1.
“In addition to executing on the top-line, our team remains focused on implementing the cost-savings initiatives we announced last year,” said Deborah Thomas, Hasbro’s chief financial officer. “We continue to expect full-year net cost savings of $50 million to $55 million, as we announced in February. Our balance sheet is strong, and we continue investing in areas intended to drive long-term profitable growth.”
The company’s quarterly financial results beat analysts’ estimates. Company shares rose to as high as $103.03 in early trading Tuesday. The stock hasn’t traded above $100-a-share on an intraday basis since November.
Segment breakdown:
- The company’s Franchise Brands segment reported a revenue of $393.6 million in the first quarter of 2019, an 8.8% increase from one year prior. The company said revenue growth was driven by the Magic: The Gathering, Monopoly, Play-Doh and Transformer sales.
- Partner Brands revenue fell 14.3% to $172 million revenue for the quarter. The company said the decline was attributable to a decrease in sales of several brands.
- Hasbro Gaming reported a revenue of $107.6 million, a 2.3% increase year over year. The company cited increased revenue from Duel Masters, Connect 4 and Twister.
- The company’s Emerging Brands segment experienced a 21.7% revenue increase to $59.4 million. The increase was credited to revenue growth in Super Soaker, Furreal Friends and initial shipments of Power Rangers.
Regional results:
- Hasbro reported a 1.1% increase in American and Canadian revenue to $357.9 million in the first quarter.
- The company’s international segment reported a 1.8% decline year over year to $282.6 million.
- The company posted a 23.6% increase over the year in its entertainment, licensing and digital segment to $912 million.
Chris Bergenheim is the PBN web editor. You may reach him at Bergenheim@PBN.com. Bloomberg News contributed to this article.
