Financial Performance

Hasbro Shares Leap on Big Sales, Earnings Beats

“We delivered a high-quality second quarter, with positive consumer trends at retail and profitable growth," CEO Brian Goldner says.
Matthew HellerJuly 24, 2019

Hasbro shares jumped to an all-time high on Tuesday after the toy maker easily beat sales and earnings estimates amid strong sales of its Avengers toys and Magic: The Gathering game.

For the second quarter, Hasbro’s revenue rose 9% to $984.5 million, well above analysts’ estimate of $956.7 million, with franchise brands revenues up 14% at $576.7 million and partner brands up 3% at $213.4 million.

The company also reported adjusted earnings of 78 cents per share, topping estimates of 50 cents per share. In trading Tuesday, Hasbro’s stock rose as much as 10% to $119.72 before closing at $119.31.

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“We delivered a high-quality second quarter, with positive consumer trends at retail and profitable growth led by several geographies and brand categories,” CEO Brian Goldner said in a news release.

As the Financial Times reports, Hasbro’s entertainment partnerships “have helped fuel growth as the toy maker, like its rivals, recovers from the 2018 Toys R Us bankruptcy. An upcoming slate of Disney films like Frozen 2 and Star Wars: The Rise of Skywalker are also likely to put Hasbro … on the front foot at the end of the year.”

Hasbro said the partners brands revenue growth in the second quarter was due primarily to increases in Marvel’s Avengers and Spider-Man franchises, including Hasbro product supporting the films Avengers: End Game, which set an all-time box office record, and Spider-Man: Far From Home.

Revenue from Hasbro’s entertainment, licensing, and digital segment rose 28% year over year, powered by its digital gaming offering Magic: The Gathering Arena.

“The company is investing heavily in this online move, which has captured the imagination of players,” The Motley Fool said, noting that players are logging about eight hours per week.

Operating profit soared 47% to $128.3 million, or 13% of revenue, up from $87.6 million, or 9.7% of revenue, in the prior-year quarter, reflecting management’s cost-cutting efforts. While Hasbro originally planned for savings of between $30 million and $40 million by 2021, the company now expects to $50 million in expense reductions in this year alone.

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