BENGALURU: The Boys category which has Nerf, Transformers, Marvel and Star Wars products led American multinational toy and board game company Hasbro, Inc., (Hasbro) growth in revenue and profits in a big way along with other categories. Boys category revenues increased 22 per cent to US$ 478.5 million in the third quarter 2014, behind growth in Nerf, Transformers, Marvel and Star Wars products.
Net revenues for the third quarter 2014 increased 7 per cent to US$ 1.47 billion compared to US$ 1.37 billion in 2013 despite foreign exchange having an unfavourable US$ 10.8 million impact on third quarter revenues. The company’s adjusted operating profit increased 9 per cent while adjusted net earnings increased 9 per cent to US$ 187.8 million or US$ 1.46 per diluted share. Hasbro’s operating profit increased 44 per cent and net earnings increased 43 per cent to US$ 180.5 million or US$ 1.40 per diluted share.
“Our third quarter results continued to reflect the momentum we are building in our franchise brands and key partner brands, the positive results of our investments globally and the benefits of leading with compelling content and storytelling,” said Hasbro’s President and Chief Executive Officer. “In the third quarter, we grew revenues across all operating segments, delivered improved profitability and took strategic steps to grow our brand portfolio and content delivery over the longer term, including forming a new strategic merchandising with Disney Consumer Products for the globally popular Disney Princess and Frozen properties.”
“Our third quarter results are indicative of Hasbro’s strong financial and competitive position,” said Hasbro’s Chief Financial Officer Deborah Thomas. “In this environment of growth and financial strength, we remain focused on improving profitability, returning cash to our shareholders and investing back into our business, through investments in innovation, systems and portfolio expansion across our blueprint.”
Hasbro speak:
Global Performance
US and Canada segment net revenues increased 4 per cent to US$ 764.3 million compared to US$ 735.6 million in 2013. The segment’s results reflect growth in the Boys and the Games categories, partially offset by a decline in the Girls and Preschool categories. The US and Canada segment reported operating profit growth of 16 per cent to US$ 169.9 million versus US$ 147.0 million in 2013.
International segment net revenues increased 11 per cent to US$ 649.3 million compared to US$ 582.7 million in 2013. Revenues grew 13 per cent excluding a negative US$ 9.7 million impact from foreign exchange. Revenues in the International segment reflect 7 per cent growth in Europe, 24 per cent growth in Latin America and 11 per cent growth in the Asia Pacific region, as well as growth in the Boys, Girls and Preschool categories, partially offset by a decline in the Games category. In total, Emerging Markets revenues increased 29 per cent. The International segment reported operating profit of US$ 116.5 million, up 10 per cent versus US$ 105.7 million in 2013.
Entertainment and Licensing segment net revenues increased 10 per cent to US$ 53.4 million compared to US$ 48.6 million in 2013. The segment benefited from growth in lifestyle licensing. The Entertainment and Licensing segment reported operating profit of US$ 0.5 million compared to US$ 7.6 million in 2013, primarily due to the impact of the acceleration of certain programming amortization costs.
Category Results
Boys category revenues increased 22 per cent to US$ 478.5 million in the third quarter 2014, behind growth in Nerf, Transformers, Marvel and Star Wars products.
Games category revenues increased 2 per cent in the third quarter to US$ 395.2 million. Franchise Brands Magic: The Gathering and Monopoly grew in the third quarter, as did Simon Swipe and Operation. These gains were partially offset by declines in several brands, including Telepods featuring the Angry Birds™ Star Wars® II game, Jenga, Bop-it and Duelmasters.
The Girls category grew 5 per cent in the third quarter 2014 to US$ 407.7 million. Growth in My Little Pony, My Little Pony Equestria Girls, Nerf Rebelle, Furreal Friends, Littlest Pet Shop and the introduction of Play-Doh DohVinci helped fuel continued growth in the category. Declines in FURBY partially offset these revenue gains.
Preschool category revenues decreased 7 per cent to US$ 188.5 million in the third quarter 2014. Play-Doh and Transformers. Rescue Bots revenues continued to grow but were more than offset by declines in other Preschool initiatives, including core Playskool and Sesame Street products.