Fewer movies in 2013 contribute to Hasbro Q2 dip
PAWTUCKET, R.I. — Hasbro reported net revenues of $766.3 million for the second quarter ended June 30, a 6% decline compared to $811.5 million in 2012. Despite seeing growth across its girls, games and preschool categories, it was not enough to offset a decline in the company’s boys category.
Net revenues in the boys category decreased 35% to $253.7 million. Nerf was actually up for the quarter but was not enough to offset brands like Marvel and Beyblade, which didn’t live up to second-quarter 2012 figures bolstered by that year’s major motion pictures.
Net earnings for the quarter were $36.5 million, compared to $43.4 for the same quarter last year. The company’s net earnings for the quarter adjusted to exclude pre-tax partial pension settlement charges of $2.5 million, associated with previously disclosed restructuring actions, were $38.3 million, compared to $43.4 million in 2012.
“As we enter the second half of the year, we have innovative brand initiatives across categories and geographies, including Nerf Rebelle, Furby Boom, My Little Pony Equestria Girls, Telepods for Angry Birds Star Wars II and Transformers Construct-Bots,” said Brian Goldner, Hasbro’s president and CEO. “Across our business, we are increasing our focus on our most important initiatives while right sizing our cost base. We have expanded our digital gaming capabilities with the acquisition of 70% of Backflip Studios, a profitable mobile game studio. Importantly, we are developing comprehensive and innovative lines for both film and television entertainment in the coming years, including Transformers 4 in 2014 as well as Marvel and Star Wars entertainment from Disney in 2014, 2015 and beyond.”
U.S. and Canada segment net revenues were $389.2 million compared to $406.6 million in 2012. The results reflect growth in the games, girls and preschool categories. The U.S. and Canada segment reported operating profit of $59 million compared to $61 million in 2012.
International segment net revenues were $340.2 million compared to $360.5 million in 2012. Net revenues in the international segment include a favorable $1.2 million impact of foreign exchange. Revenues in the International segment reflect growth in emerging markets as well as the games, girls and preschool categories. The international segment reported operating profit of $14.8 million compared to $29.9 million in 2012.
Entertainment and licensing segment net revenues were $35.3 million compared to $43.2 million in 2012. Second quarter 2012 revenues reflected a higher mix of revenues from television programming sales for digital distribution. The entertainment and licensing segment reported an operating profit of $3.7 million compared to $8.2 million in 2012.
The games category posted its third consecutive quarter of growth, increasing revenues 19% in the second quarter 2013 versus last year. Both of the company’s games franchise brands, Magic: The Gathering and Monopoly, were up in the quarter. Additionally, many other games brands grew, including Twister, Jenga and the Elefun & Friends collection.
The girls category posted its fourth straight quarter of growth, increasing 43% in the quarter. Furby and My Little Pony were the primary contributors to the strong year-over-year growth.
The preschool category also grew in the second quarter, increasing 4% to $107.8 million. Play-Doh, Playskool Heroes, led by Transformers Rescue Bots, and Sesame Street products all grew in the quarter.