Hasbro reports higher sales on ‘Frozen 2,’ ‘Star Wars’ toys
Hasbro Inc. posted earnings that topped analysts’ estimates as toys based on “Frozen 2” and “Star Wars” helped it overcome the fallout from President Donald Trump’s trade war with China. The shares jumped in early trading.
Excluding some items, profit of $1.24 (U.S.) a share far outpaced the 88-cent average projection. Revenue rose three per cent to $1.43 billion, the Pawtucket, R.I.-based toymaker said Tuesday. That was shy of estimates for $1.44 billion.
Hasbro has bounced back after the threat of tariffs weighed on the third quarter, disrupting the company’s supply chain and leading some retailers to cancel shipments.
It has been working to diversify its supply chain to reduce its reliance on sourcing in China.
On an earnings call with analysts Tuesday, chief financial officer Deborah 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.
Shares of Hasbro rose as much as 9.3 per cent in premarket trading before paring some of the gain. The stock had dropped 4.5 per cent this year through Monday’s close after advancing 30 per cent last year.
Revenue in the entertainment, licensing and digital segment rose 22 per cent last year. Hasbro recently completed a $4-billion, all-cash purchase of British production and distribution company
Entertainment One Ltd., giving it access to new content with brands like “Peppa Pig” and “PJ Masks.”
“Magic: The Gathering Arena” and the “Transformers: Bumblebee” film helped drive entertainment and licensing revenue. Analysts forecast Hasbro bested its rival Mattel Inc. over the holiday season, with a strong showing from “Frozen” and “Star Wars” branded products.