Marvel sales help Hasbro soothe Toys ‘R’ Us headache
US toymaker Hasbro Inc beat expectations for quarterly profit and revenue on Monday as a jump in Marvel toy sales helped it recover ground lost in last year’s Toys ‘R’ Us bankruptcy.
Expectations for earnings by the maker of Play-doh and Monopoly were almost half of what they were a year ago going into the results release, driven chiefly by concerns over the disappearance of its biggest retail partner.
In the event, net earnings fell 11% to $60.3 million, or 48 cents per share, but were way past analysts’ average estimate of 29 cents per share — the biggest beat in nearly two years, according to Thomson Reuters I/B/E/S.
“We don’t expect to recapture all of the loss (of ) revenue in 2018, but by 2019, we should have moved beyond Toys ‘R’ Us,” chief executive Brian Goldner said.
Toys ‘R’ Us accounted for 10% of all Hasbro sales and the company has moved quickly to reallocate inventory to Walmart Inc, Target Corp and others. Partnerships with big media producers like Walt Disney Co also helped.
The company was also creating exclusive products and programmes online to support retailers and retail events such as JD.com’s JD day, Amazon.com’s Prime Day, and the 11/11 Alibaba Singles Day, executives said on a post earnings call.
Hasbro said it had benefited from higher sales of a Marvel portfolio that has been boosted by two of the past year’s biggest movie successes, Avengers: Infinity War and Black Panther.
Revenue at the company’s three main business segments all topped estimates based on the forecasts of three sector analysts, according to data firm FactSet.
D.A. Davidson analyst Linda Bolton Weiser said Hasbro’s performance was extremely good this quarter and it should be a really strong year going forward.
“They’ll mitigate quite a bit of the loss in third and fourth quarter,” she said.
The company’s overall revenue fell 7% to $904.5 million in the quarter, but was nearly half the drop that analysts were expecting. Analysts on average were estimating revenue of $833.1 million.
The only segment to report an outright rise in revenue was the entertainment and licensing business, which rose nearly 26% to $64.7 million in the quarter.